How to Transfer Vehicle Insurance While Buying a Second-Hand Vehicle

  • Author :
  • TATA AIG Team
  • Published on :
  • 26/04/2021

The demand for second-hand vehicles has always been high in India. Second-hand cars give new owners the liberty to hone their driving skills and get a brand of their choice at an affordable price. Now more than ever, the demand for second-hand cars and bikes is on the rise due to the COVID-19 pandemic. More and more people are opting for private transport to adhere to the social distancing rules and avoid the risk of contracting the virus.

However, while most people focus on buying the vehicle and getting the ownership transferred to their name, they forget about transferring the insurance for a car or bike. This can land not only them but also the previous owner (the seller) of the vehicle in legal and financial trouble. It is essential to transfer your bike or car insurance to avoid any monetary loss or legal complication while buying a second-hand bike or car insurance.

How to transfer car insurance?

All car insurance companies in India require the new owner to get the ownership and insurance for the car transferred to their name from the seller. First, the parties need to facilitate the transfer of the car’s ownership with the Regional Transport Office (RTO) closest to their area. After the successful transfer of ownership, the parties have 14 days to carry out the transfer of vehicle insurance.

At Tata AIG Insurance, the seller (existing customer) must inform us of his/her intention of selling the car. The buyer or the seller must provide us with the list of documents mentioned below:

⦁ A letter/application requesting for a cancellation of the seller’s existing insurance policy ⦁ A copy of the new and updated registration certificate of the vehicle ⦁ The sale deed capturing the change in ownership between the parties ⦁ A copy of the seller’s insurance policy ⦁ A No Objection Certificate from the seller ⦁ An affidavit duly signed by both parties ⦁ An application for the vehicle’s inspection ⦁ A copy of the buyer’s address proof

On the receipt of these documents, we will verify the same. On approval, we will issue an endorsement certificate, which can take up to 14 days.

It is also vital to remember that during these 14 days, you will get automatic coverage for any third-party damage. However, any own damage coverage or add-on protection will not be afforded to you. Moreover, in case you fail to transfer your vehicle insurance, the third-party coverage will also expire, and you will not be eligible to get car insurance online.

**Who will the accumulated No Claim Bonuses belong to – the seller or buyer? **

When you are getting the insurance transferred to your name as a buyer, the No Claim Bonus (NCB) accumulated on the policy will not be transferred to you. NCBs are discounts on premiums given to the car owner for not raising a claim during a year which lowers their car insurance rates. Hence, they will belong to the previous owner of the car - the seller. This is because NCBs are given to the car owner based on his/her driving history and behavior on the roads. So, it is only sensible that the seller retains the benefit of the NCBs and gets it transferred to his/her new vehicle through an NCB retention certificate.

**How to file for an NCB retention certificate? **

To get the NCB retention certificate, the seller has to submit the following documents to us:

  • Original insurance policy
  • A letter requesting policy cancellation
  • Copy of the new RC
  • A copy of the sale deed
  • RTO form 29
  • RTO form 30

The seller can also apply for the certificate within 90 days from the date of selling their vehicle.

Why should you transfer car insurance?

Transferring vehicle insurance is essential for both the buyer and seller. In case the transfer is not carried about for any reason, this is what can happen:

  • If there is any third-party damage or damage to the vehicle, the buyer will not be able to raise a claim. In case he/she does so, we have the full right to reject the claim as the insurance policy will be in the name of the previous owner.
  • As a seller, if there is any third-party damage or damage to the vehicle, you will be responsible for paying for and settling the cost of damages incurred to the third party and the vehicle. In case you avoid fulfilling the liabilities, you can even be called upon by a court of law to do so.


Whether you are looking to get car insurance online for a used car or a new car, you can trust TATA AIG four-wheeler insurance to get you through the process seamlessly. As TATA AIG operates under the umbrella of the 150-year-old legacy of TATA, it promises to put you first. Just use our car insurance online calculator and get started.

A quick revision with some Frequently Asked Questions:

Can insurance be transferred to the purchaser of the vehicle?

Yes, insurance can be transferred to the purchaser of the vehicle. In fact, it is mandatory to do so if the purchaser and seller want to avoid any legal or financial consequences.

How do I transfer insurance while buying a used or second-hand car?

To transfer insurance while buying a used car, the buyer and seller should work together. They must submit an application and the necessary documents within 14 days of the transfer of ownership to facilitate the transfer.

Is insurance mandatory for RC transfer?

Yes, an insurance policy is mandatory for transferring the ownership and RC at the RTO. In case you don’t get car insurance online or offline, you will not be able to carry out the transfer.

What is the procedure to transfer car insurance?

To transfer car insurance, you must contact us and inform us about the sale of your vehicle. After that, you must submit the necessary documents and wait for us to accept your transfer application and issue an endorsement certificate.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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