How to Transfer Car Insurance Policy?

by SMCIB on Tuesday, 20 February 2024

How to Transfer Car Insurance Policy?

In our modern world, cars often transcend their utilitarian function, evolving into expressions of our personalities and aspirations. From the rugged adventure of an off-road SUV to the refined elegance of a luxury sedan, our vehicles symbolise significant investments of both resources and emotion. But in all this journey we often forget about an important small step, transfer of car insurance. Changes in ownership can range from the exhilarating acquisition of a dream car to the bittersweet farewell to a faithful companion. Whether you're passing the keys of a cherished classic to a new enthusiast or navigating the complexities of selling a well-travelled vehicle, understanding the intricacies to transfer car insurance is essential for a seamless and legally sound transition.

Buckle up, today we're diving into the often-overlooked world on how to transfer car insurance policies.

Why Should You Transfer Your Car Insurance Policy?

Wondering why bother with the hassle of insurance transfer for your car? Let's break it down for you! See, here's the deal, car insurance isn't just tied to the person behind the wheel, it's hitched to the vehicle itself. So, when ownership shifts to someone new, that insurance needs to come along for the ride. It's not just a matter of paperwork; it's about safeguarding yourself against potential headaches down the road. Here's why making that transfer is absolutely essential:

  • Protect Yourself Against Future Liabilities
    If you're involved in an accident and the insurance isn't transferred to your name, any claims made by third parties could be rejected, leaving you legally liable to pay out of your own pocket.
  • Retain Your No Claim Bonus (NCB)
    NCB is like a pat on the back from your insurer for being a safe driver. If you haven't made any claims during your policy period, you're eligible for a discount on your next premium.
    As a seller, informing your insurer about the sale and redeeming your NCB Certificate ensures you don't miss out on these valuable discounts when you purchase a new insurance policy.
  • Avoid Legal Hassles
    Failing to transfer car insurance along with the vehicle's ownership can lead to legal complications. Ensuring all vehicle documents, including insurance, are transferred to your name helps you stay compliant with legal requirements and protects you from potential legal troubles in the future.

So, take the necessary steps to transfer your insurance. Let’s go through them one by one.

Documents Required to Transfer Car Insurance to New Owner

When it comes to transferring your car insurance policy to a new owner, having the right documents on hand is key to a smooth transition. Here's what you'll need to gather:

  • Application Form: This form serves as your official request to transfer the insurance policy to the new owner. It provides essential details and serves as a formal application for the transfer process.
  • Form 28: This form is crucial for obtaining the No Objection Certificate (NOC) from the Regional Transport Office (RTO). It acts as an application for the NOC and serves as proof that the seller has no outstanding liabilities related to the vehicle, clearing the path for the ownership transfer.
  • Form 29 (Intimation of Vehicle Ownership Transfer):This form notifies the registering authority or RTO that the vehicle is being sold by the previous owner. It confirms that all necessary documents, including the RC, insurance policy, and Pollution Under Control (PUC) certificate, have been handed over to the buyer.
  • Form 30 (Acknowledgement of Ownership Transfer): This form acknowledges the transfer of car ownership from the seller to the buyer. It confirms that all legal liabilities and responsibilities associated with the vehicle have been transferred accordingly.
  • NOC from the Existing Policyholder: This document, issued by the current policyholder, confirms their consent to transfer the insurance policy to the new owner.
  • Inspection Report: Conducted by the insurance company, this report assesses the condition of the vehicle and ensures it meets the insurer's requirements for coverage transfer.
  • New Registration Certificate: This document serves as proof of the vehicle's registration under the new owner's name.
  • Clearance Certificate: Required if you're migrating the vehicle from one RTO to another within or outside the state, this certificate includes details of both the buyer and seller, along with the vehicle's information.

By ensuring you have these documents in order, along with any other specific requirements from your insurance provider or local authorities, you can streamline the process of your car insurance transfer to the new owner. Don't forget to double-check the necessary paperwork and fees to avoid any delays or complications during the transfer process.


How to Transfer Car Insurance?

Navigating the transfer of car insurance ownership is a pivotal undertaking. As outlined by regulatory mandates from the transportation authority, the onus lies squarely on the seller to execute the transfer of the vehicle's insurance policy to its new custodian. Ensuring that the insurance is seamlessly transitioned into the name of the new owner is paramount because of legal implications. Now, let's delve into the essential steps required to facilitate the transfer of car insurance.

  • Ensure you have all the necessary documentation to initiate the vehicle insurance transfer process.
  • Apply for the transfer of the car insurance policy promptly after completing the ownership transfer procedure, adhering to the specified timeframe.
  • Choose the comprehensive car insurance plan and any optional add-on coverage deemed necessary.
  • Provide all essential documents, including Form 28, Form 29, Form 30, and the Sale deed, to initiate the transfer of your car insurance policy.
  • A surveyor will be dispatched by the insurance company to inspect the vehicle.
  • Once the assessment is concluded, the policy will be transferred to the new owner's name.

Important Things to Keep in Mind While Transferring Car Insuranc

Key considerations for transferring car insurance ownership are as follows


  • Notify Your Insurance Provider: Inform your insurance company promptly about the change in ownership. Provide the new owner's details and contact information to ensure seamless communication.
  • Discuss Transfer or Cancellation: Clarify with your insurer whether the new owner can assume the existing policy or if a new policy is required. Coordinate the cancellation or transfer of the current policy if the new owner is obtaining their own insurance.
  • Request Policy Endorsement: Request an official endorsement from your insurance company to transfer the policy to the new owner. Ensure the endorsement specifies the effective date of the transfer for clarity.
  • Provide Required Documentation: Furnish any necessary documentation, such as Form 29, Form 30, and the sale deed, to facilitate the ownership transfer process.
  • Manage Premium Payments: Address any outstanding premium payments to prevent complications during the transfer. Clarify payment arrangements with your insurer to ensure a smooth transition.
  • Be Aware of Associated Costs: Understand any fees associated with transferring the policy and make the necessary payments. Some insurers may charge a nominal fee for processing the transfer, so be prepared for potential costs.
  • Prepare for Inspection: Be aware that some insurance companies may require a vehicle inspection before approving the transfer. Ensure the vehicle is in suitable condition for inspection if this step applies.

Now that we are aware of the overall procedure, let’s look into the nitty-gritties of the transfer.

What is No Claims Bonus in Transfer of Car Insurance?

No Claims Bonus (NCB) serves as a rewarding incentive for people who refrain from filing claims during their insurance coverage period. This bonus is bestowed in accordance with the regulations set forth by the Insurance Regulatory and Development Authority of India (IRDAI).

Now, here's the cool part, even if you decide to switch gears and change your insurance provider or upgrade to a new set of wheels, you can still cash in on the NCB accumulated under your name. But there's a catch—you'll need a little document called the No Claim Bonus Transfer certificate from your insurer to keep the benefits rolling. Having said this, it's essential to note that maintaining continuity in your insurance coverage is paramount in such situations. Ensure there is no lapse exceeding 90 days between the expiration date of your previous policy and its renewal to uphold the validity of your NCB.

Furthermore, it's crucial to understand that NCB benefits are intrinsically linked to the car owner rather than the vehicle itself. Consequently, in the event of a vehicle sale, the NCB cannot be transferred to the new owner. It remains associated with the individual policyholder's insurance history.

Can No Claim Bonus Be Transferred to The New Car Owner?

The No Claim Bonus (NCB) cannot be passed on to another individual, even if you've transferred your car insurance policy.

When you sell your vehicle and transfer both its registration certificate and insurance policy to the buyer, you're entitled to keep your NCB intact. However, it stays with you, not the new owner. Once the transfer is complete, it's time to snag an NCB retention letter from your insurer. This letter allows you to carry over your NCB discounts to a new car insurance policy, saving you some bucks on the premium.

But here's the kicker, if the car insurance policy transfer doesn't happen, you can bid goodbye to those NCB benefits. So, make sure you look into all details to ensure a smooth transition and keep those bonus points in your pocket.

What Happens If The Transfer of Car Insurance is Incomplete?

If the transfer of your car insurance policy remains incomplete, there are some critical consequences to be aware of. Firstly, only the third-party section of the policy gets automatically transferred. This means you won't enjoy coverage for Own Damage Insurance (OD) or any additional add-ons that may have been part of your previous policy.

Now, here's the catch! If you fail to transfer the car insurance policy into your name, the insurer holds no obligation to cover any losses you may incur. This includes both third-party liabilities and damages to your own vehicle.

There's more. In the unfortunate event of an accident caused by the new owner of the vehicle, the court may issue a notice to the previous owner to compensate for any losses sustained by the third party. It's a messy situation that could have legal ramifications.

Who is Responsible for The Transfer of Car Insurance Policy?

According to Section 157 of the Motor Vehicle Act, the responsibility for transferring the insurance policy lies squarely on the shoulders of the seller. It's their duty to ensure the policy is transferred to the buyer's name within 14 days of the vehicle purchase. Failure to do so can lead to complications and potential legal consequences down the road.

Summing Up!

In conclusion, understanding the intricacies of transferring car insurance is essential for a seamless transition when changing vehicle ownership. By following the necessary steps and being aware of key considerations, you can ensure that both the seller and the new owner are properly protected on the road. So, whether you're passing on the keys or receiving them, make sure your insurance affairs are in order for a smooth journey ahead.


  1. Can car insurance be transferred?
    Yes, a car insurance policy can be transferred. Typically, you'll need an application form, Form 28, Form 29, Form 30, a No Objection Certificate (NOC) from the existing owner, an inspection report from the insurance company, and the vehicle's registration certificate in the name of the new owner.
  2. Is it important for the seller to transfer the car insurance policy?
    Yes, it's crucial for the seller or previous owner to cooperate in transferring the car insurance policy to ensure a smooth transition for both parties.
  3. Can I transfer third-party car insurance?
    Yes, third-party car insurance can be transferred from the previous owner to the new owner of the vehicle. While it's automatically transferred for the first 14 days after purchase, it's essential to complete the transfer process for continued coverage beyond this period.
  4. Can I transfer my NCB to the new owner of my car?
    No, the No Claim Bonus (NCB) is associated with the insurance policy owner, not the insured vehicle. Therefore, it cannot be transferred to another name, including the new car owner.
  5. Can I transfer car insurance online?
    Yes, it's possible to transfer car insurance online. Many insurance companies offer online services and portals that allow policyholders to initiate the transfer process conveniently over the internet.
  6. Can I transfer my old car insurance to a new car?
    No, it's not possible to transfer old car insurance to a new vehicle. However, you can either continue with the same insurance company by transferring the policy to your name or opt to switch to a new insurer for coverage on your new car.


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