Recently bought a used car? Get the insurance transferred before you and the seller land in a soup!
The used car market in India is booming. One of the key factors driving this boom is the easy access to Used Car Loans in the country. Plus, the cost of a used car easily matches the budget limit of a majority of customers too. However, although it is pretty easy to buy a used car today, many second-hand buyers tend to disregard important things that they must do while buying a used a car.
So, if you’re planning to buy a used car or have bought one recently, one of the first things you must do, without fail, is to transfer the insurance.
Additional Reading: Things You Must Know Before Buying a Used Car
Transfer of insurance
For starters, let’s understand Motor Insurance policies. Basically, a Motor Insurance policy covers own damages and third-party damages.
These are damages suffered by you and your vehicle in case of an accident.
These are the damages caused by your vehicle to a third-party in case of an accident.
Additional Reading: Transfer Of Ownership Of A Used Car
Why you should transfer the insurance?
If you’ve bought a used car, then you must get the existing Motor Insurance transferred to your name within 14 days of the sale. This is mandatory under section 157 of the Motor Vehicle Act.
What happens if you don’t transfer the insurance policy to your name?
Let us help you understand this with the help of an example.
Shiva Raman bought a second-hand car last month. However, he did not get the insurance policy transferred to his name. A week ago, he met with an accident. He raised an insurance claim for third-party and own damage. However, the claim was rejected by the insurance company. On top of this, the third party involved in the accident sent a court notice to the previous owner for the damages caused. And unfortunately, the previous owner had to pay for the same.
If you don’t transfer the insurance policy to your name within 14 days after buying a used car, then
- You cannot claim insurance for own damage or third-party damage in case of an accident. The insurance company is not liable to pay for any damage caused to you or the third party.
- The court can send a legal notice to the previous owner of the car and he or she will have to compensate for the damages caused during the accident, even though he or she wasn’t involved in the same.
How to transfer insurance to your name
It is a pretty easy process. Here’s how to go about it:
- Fill a fresh proposal form.
- Submit all evidence of sale to the insurance company. This includes the transferred registration certificate (RC), Form 29 and Form 30 signed by the previous owner, a copy of the previous policy and the transfer fee.
- Once you’ve submitted the above, the insurance company will start the transfer process.
Keep in mind that the transfer of ownership in the registration certificate (RC) may take some time. However, if you follow the steps mentioned above correctly, then there won’t be any hindrance to the transfer process. Simple, isn’t it?
Learned all about transferring insurance while buying second-hand cars? Good! Now why don’t you test your knowledge about money by taking this simple 10-question quiz? Take the Money Quiz now.
Additional Reading: Popular Used Car Loans In India
By the way, we have great offers running on our Used Car Loans. So, if you’re planning to buy one, you may want to check them out.