Buying a new car is one of the important breakthrough that call for a decent amount of homework. The enthusiasm of new car must not overhaul your onuses linked to the selling of your current one. While you must be conscious of several legal formalities linked to the same, we want to make sure that you don’t miss out on any related to the car insurance.
The set of rules laid down in the Motor Vehicles Act, 1988 necessitate the transfer of the insurance policy in the name of the new buyer in order to safeguard its benefits. Here’s what needs to be followed in case you’re in the process of selling your used car.
Things you should do as a transferor:
Transfer the ownership of your car: The first step in transferring the insurance policy is to transfer the car’s ownership to the new buyer. For changing the ownership, you will have to submit the following documents:
- The Registration Certificate of your car
- Your Certificate of Insurance
- Forms 29 and 30 which are duly filled and signed by you and the buyer
- The buyer’s address proof
- An affidavit from you and the buyer which shows the change in ownership
- The required fee
Transfer the ownership of the policy: The next step is to transfer the insurance policy in the buyer's name. This can be done by writing and informing the insurer of the change and submitting the supporting documents which include:
- The Application Form for changing the name
- The valid Certificate of Insurance
- The Registration Certificate which has been changed and shows the buyer’s name as the car’s owner
- The required fee, if any.
Get your No Claim Bonus Certificate: If you have not claimed on your car insurance policy, you are entitled to a cumulative No Claim Bonus which discounts your subsequent own damage premiums. If you have any bonus to your credit, you can carry it forward to your new car. But, first you have to obtain the No Claim Bonus certificate from your insurer reflecting your accumulated bonus.
Important note for the Transferee:
Though transferring the policy is the job of the seller, you as a buyer should also be involved in the process because, as mentioned above, your documents and consent will also be needed along with the forms. You should not sit around for the buyer to complete the process but get the policy transferred as early as possible because if you face any claim and the policy is still in the name of the previous owner, the claim will be paid to him and not you. So, the burden of getting the insurance transferred rests on your shoulders too.
The last word
Transferring the insurance policy to another person's name is easy if you follow the steps and submit the required documents. If you are confused, you can approach your broker who will help you with the transfer process. Whatever you do, make sure you complete the process and transfer the policy so that you are free from any legal technicalities which might entail if there is a claim for your old car.