Purchase of used cars instead of the new ones is becoming increasingly prevalent in India. It is not only easier on the pocket, but also a more responsible approach towards vehicle ownership. However, while buying a used car, it’s imperative to check certain critical aspects such as dents or damages on the body, condition of the tyres, the health of the rotors, etc.

After you’ve paid the agreed amount to the owner of the car, the next thing that you need to do is transfer the ownership of the vehicle in your name along with the car insurance policy. Through this article, you will get to know about various aspects of car insurance transfer in case you decide to sell or purchase a pre-used car.

How to get insurance for a second-hand car?

There are two paths to get insurance for your second-hand car:

1. Transfer of existing policy

In order to drive a vehicle in India or claim for the damages to your vehicle, having a car insurance policy is compulsory. Hence, when you buy a second-hand car, it’s your responsibility to make sure that the existing owner transfers the insurance policy of the vehicle in your name.

2. Buying a new policy

You can also take the other route by purchasing a fresh car insurance plan instead of seeking for the transfer of existing policy. It enables you to get your car insured from the insurer you prefer and trust. This route is easier for the buyer since he/she can conveniently buy car insurance online.

The process of car insurance transfer

It is the responsibility of the seller to transfer the car insurance policy of his/her vehicle to the new owner. As per the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI), the insurance company should be intimated by the seller in writing about the transfer of ownership of the vehicle.

The seller may also have to pay a nominal fee for the transfer of motor insurance policy from himself or herself to the person who is buying the vehicle.

What about the accumulated No Claim Bonus?

When a car insurance policy is transferred in the name of a new owner of the vehicle, the No Claim Bonus (NCB) is the only thing that cannot change hands. This is because car insurance is meant to cover the damages sustained by the vehicle, but the NCB is for a specific person under whose care the car did not get involved in an accident or a collision.

Hence, the NCB accumulated by a car owner does not gets transferred in case he/she decides to sell his/her vehicle to another person. What needs to be noted here is that the previous owner of the car can carry forward the NCB garnered by him/her and avail discounts on motor insurance premium for his/her new car, in case he/she decides to purchase one.

So, if you’re buying a used car, you should responsibly ask the vehicle owner to transfer the existing car insurance policy in your name. Alternatively, you can get a fresh car insurance policy for your vehicle. You can even purchase 4-wheeler insurance online, from the convenience of your home.

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