Four Things to Remember for an Effortless Used Car Insurance Transfer

A car is one of the first dream purchases of many young people after they start earning. Buying a used car is the first step for those with a budget and other kinds of constraints. It could also be a step before buying a bigger or more elite model. In some cases, a used car is a second car in the family. Therefore, the used car market is just as active with several buyers and sellers.

While buying a secondhand car, people focus on getting the registration certificate transferred. But they are not aware of the transfer of four-wheeler insurance to their name.

What is the process for car insurance transfer?

The seller should transfer the ownership through the change in the registration certificate (RC). For this purpose, completed and signed Forms 28, 29, and 30 should be submitted to the local RTO along with the following documents: RC, tax paid certificate, pollution under control (PUC) certificate, declaration of sale, copy of the current policy, an affidavit confirming the sale and identity and address proof of the buyer.

Most buyers and sellers pay attention to transferring the ownership but do not consider the transfer of insurance. We have seen the consequences of not transferring the insurance to the buyer. Therefore, as parties to a contract, the buyer and seller should complete the process accordingly.

Here are four things to remember when the insurance on a used car is transferred.

  1. Inform the insurance company

The seller should inform the insurance company about the intention to transfer the ownership. Then, he/she should apply for cancellation of the policy.

  1. Submit the policy documents and transfer forms

The original policy document, Forms 29 and 30 (both of which relate to the transfer of ownership being confirmed by the RTO), RC book in the name of the buyer, and a delivery note for transfer of possession of the car should be submitted.

  1. Obtain the NCB retention certificate

The main exception in the transfer of motor insurance is that the NCB remains with the seller even though the insurance policy is transferred to the new owner. For this purpose, the insurance company will issue an NCB retention certificate. For this purpose, a no-objection certificate should be issued by the buyer.

  1. Transfer the policy

After the NCB retention certificate is issued, the insurance company will transfer the policy in the buyer’s name after a fresh application is submitted. They may conduct an inspection and the difference in the full premium and after applying the NCB shall be paid.

The transfer formalities should be completed within 14 days of the transfer of ownership. During this period, third-party coverage would be available to the buyer. If there is a claim lodged during the period the transfer is in process, it will be settled only after the proof of transfer of insurance is submitted to the insurer. Leading insurance companies offer a seamless claim process, even in cases of used car insurance transfer. For example, TATA AIG car insurance claims can be lodged conveniently with excellent customer support at each step.

Why Should You be Particular About the Car Insurance Transfer?

Under the Motor Vehicles Act, 1988, every car that is driven on a public road should be covered by at least a third-party insurance policy. Failure to drive a vehicle without a valid policy is an offence and can invite a hefty fine and even imprisonment. So it is essential for car owners to hold a policy and make sure that it is renewed on time.

Now, when a person sells his car, they have to transfer the ownership to the buyer. This is done by transferring the registration certificate to the buyer. Along with the registration certificate, the insurance policy should also be assigned to the new buyer so that they may continue to avail of the coverage under the policy.

Car insurance transfer is an essential process to complete the sale of a car. The car will be transferred to the new owner once the payment has been made and the registration transferred in their name. However, it can be driven on the roads only with a valid car insurance policy. Whether a third-party only or a comprehensive policy, the four-wheeler insurance should be held in the new owner’s name.

If the used car’s insurance is not transferred, then the insurance company will not entertain any claim from the new owner should the vehicle meet with any unfortunate incident like accident, vandalism etc. The claim in the old owner’s name also cannot be entertained as he/she is not the legal owner of the vehicle anymore.

If as the new owner you choose to buy a new policy, then you could end up paying a higher premium. Therefore, if you are buying a used car, remember to get the insurance transferred to your name. Some car insurance companies offer seamless transfer processes. You can visit the website of the respective car insurance provider and check the process.


Thus, the transfer of insurance is a joint responsibility of the buyer and seller. Only then can the buyer continue to enjoy stress-free ownership and claims processing.

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