The moment the vehicle’s registration is transferred to the new owner, the corresponding car policy must also be transferred within 14 days of the RTO ownership transfer. This is a mandatory requirement set by the Motor Vehicles Act, 1988.

The process of car insurance transfer is straightforward but requires attention to detail. Here is how you can do it step by step -
1. Inform TATA AIG about the purchase and request a car insurance name transfer.
2. Submit the application along with the required documents to initiate the transfer process.
3. Upon receiving the application, we will thoroughly verify the documents and issue an endorsement certificate that reflects the change of ownership.

A smooth car insurance name transfer depends on the timely and accurate submission of the right paperwork. The following is a standard list of essential documents required for a smooth transfer of car insurance in India -

• Copy of Form 29 and Form 30.
• A letter/application requesting a cancellation of the seller’s existing insurance policy.
• A copy of the new registration certificate of the vehicle.
• The sale deed that captures 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, i.e., you and the seller.
• An application for the vehicle’s inspection.
• A copy of your address proof.

Note - The insurer may request additional documents based on requirements or the specific circumstances of the vehicle transfer. It is recommended to verify the complete document list with your insurer beforehand.

Legal Compliance and Mandate

The Indian Motor Vehicles Act, 1988, requires every vehicle on public roads to have a valid motor insurance policy. IRDAI regulations further mandate that the insurance policy must be in the name of the vehicle's registered owner. If the vehicle's RC is in your name but the car policy is in the seller's name, the policy is legally void. This is one of the most important reasons to transfer insurance to the new owner immediately.

Continuity of Coverage

The transfer process ensures that the existing policy remains active in your name immediately after the sale is completed. Without a transfer, the car policy is void for you as the new owner, exposing you to significant financial risk from the moment of purchase. Completing the transfer within 14 days avoids any gaps in protection, ensuring you remain legally compliant and financially safeguarded.

Convenience in Claim Settlement

If the car policy is not in your name, any claim you file will be rejected by the insurer, even if the policy is active. Insurance companies only process claims submitted by the valid policyholder (the registered owner). A proper transfer guarantees that you can conveniently and rightfully access the financial protection and benefits offered by the policy.

The No Claim Bonus (NCB) is a benefit given to policyholders who do not make any claims during the policy year. Here is how it works during a car insurance transfer -

• NCB belongs to the Policyholder, not the Car - The seller retains the NCB even after selling the car. This means the NCB cannot be transferred to you.

• Buyer Starts Fresh - When you transfer vehicle insurance to your name, you start without any accumulated NCB. You can, however, build your own NCB over time by driving safely and avoiding unnecessary claims.

• Seller’s Benefit - The seller can apply for an NCB retention letter or NCB certificate from the insurer to get the earned NCB benefits for their new car policy. The insurer can only provide this letter after the seller transfers their previous car insurance to the new owner.

• Buyer Pays the Differential Premium - Since you, as the buyer, do not get the seller's NCB, the premium for the remaining term of the policy must be calculated without that discount. You will need to pay the difference in the premium that was originally discounted to the seller.

According to Section 157 of the Motor Vehicles Act, 1988, the responsibility for ensuring a successful insurance transfer is shared, but a clear, time-bound legal duty rests specifically with the new owner.

When the ownership of a motor vehicle is transferred, the insurance certificate is deemed automatically transferred in favour of the new owner from the date of sale.

However, to formalise the transfer with the insurer, the transferee (the new owner) must submit an application within 14 days of acquiring the vehicle using the prescribed form. This ensures that the insurer updates the car policy to reflect the new ownership.

Failure to comply may lead to complications in claim settlement or legal issues, as the insurer recognises the policy only in the name of the registered owner.

In essence, while the transfer is legally effective from the date of sale, the new owner is responsible for completing the formal transfer of car insurance in India to ensure uninterrupted coverage and compliance with legal requirements.

Ignoring the procedural requirement to transfer car insurance in India exposes the new owner to significant risk and legal penalties, including

• Claim Rejection - The most impacting consequence is the rejection of any claim. If you are involved in an accident, the insurance company is within its rights to deny coverage. The legal and financial burden of repairs, medical expenses and third-party liabilities will fall entirely on the new car owner.
• Legal Penalties - Driving a car with an insurance policy not in your name is equivalent to driving an uninsured car in the eyes of the law. While the vehicle is insured, the insurable interest is missing. This means that authorities can impose heavy fines as mandated under the Motor Vehicles (Amendment) Act, 2019, for driving without valid car insurance in India.

The purchase of a second-hand car is an exciting milestone, but it must be completed with diligence. The transfer of the car insurance policy to the new owner is a non-negotiable step to secure your investment and ensure compliance with Indian motor vehicle laws.

Before you start the paperwork, it is wise to check your car insurance status online. This helps you confirm the validity, expiry date and coverage type of the existing policy. Verifying the policy online also allows you to spot lapses, pending premiums or claims history early so you can ask the seller for any missing documents (such as the original policy copy) before initiating the transfer.

At TATA AIG, we offer a wide range of transferable auto insurance policies designed to meet every driver’s needs. Our plans start at just ₹2,094 per year*, offering robust protection at affordable rates. Plus, when you buy our car insurance online, you can save up to 90% on your premium* and enjoy instant policy issuance, easy claim settlement and round-the-clock assistance.

Secure your second-hand vehicle today with TATA AIG and get the right coverage at the right price, in just a few clicks!