Ignoring Insurance Transfer For Used Car Could Be Risky
When you buy a second-hand car remember to transfer its key documents, especially its insurance, here’s why.
In India the sale and purchase of second hand cars is common and an ever growing market. Moreover, with a number of new agencies that mediate or check the car for you it has become easier than ever. However, unlike other transactions a car’s ownership does not end with this exchange. It is crucial to also transfer the name of ownership in the legal documents relating to the car. It is especially important to remember to do the same for your car insurance policy. Forgetting to do this transfer can be risky. Read this article to find out why.
What Documents Must You Have And Check When Purchasing a Second Hand car?
The following are the documents you must have with you and transfer to your name, when you purchase a second-hand car:
- The Registration Certificate
- Insurance Policy
- Form 32 and 35- this is in case the owner has an active loan for it.
- Service Book
- Invoice for the Purchase of the Car
- Dual Fuel Certificate, in case the car can run on two types of fuels.
Why is it Important to Transfer the Car Insurance After Purchase?
Car insurance policies compensate the owner in case of accidents. This way they act as a protection from uncertainties and the financial instability it can bring. Both the seller and the buyer must be conscious to make this transfer after the transaction.
1. Liabilities: In case of mishap, with the name of the previous owner on the policy document, you will not be able to file a claim. Moreover, the previous owner will be held liable for the event. This is especially problematic in cases which involve a third party.
2. No Claim Bonus: It is the reward that you receive from the insurance company for claim free years. If you are the seller remember to make the transfer. Without it you cannot avail the discounts that come with it. As the buyer, without the transfer you will also not be able to avail the NCB for your claim free years.
Click here to read everything about second hand car insurance.
What is the process of transferring a Car Insurance Policy?
A transfer of car insurance policy should be done in tandem with the transfer of ownership. When the car is taken by its new owner, the policy of the previous owner is no longer valid and must be transferred according to IRDAI regulations. The following are the documents you will require to make the change:
- New copy of registration certificate or form 29
- Previous Policy Document
- Application Form, duly filled
- Inspection Report
- No Claim Bonus difference amount
Must Check
Also Read
Process to Apply for Driving Licence Online?
Things You Should Know Before Selling Your Car
Conclusion
In a nutshell, the purchase of a second hand car comes with a number of documents that must be transferred to the new owner. Car Insurance is one of these documents and making the transfer is crucial. Without it leaves the previous owner liable for the damage and the new owner unable to file for claims. However, unlike other aspects of insurance, the NCB is not transferable, it remains with the previous owner as a NCB retention letter and can be availed as discounts in their next insurance purchase.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
