How to Transfer Car Insurance to a New Owner in India
Jessica Henderson When a car changes ownership, its insurance policy must also be transferred to the new owner. Many people focus only on the vehicle registration transfer and forget about insurance. However, transferring car insurance is not just important—it is legally required in India.
This blog explains how to transfer car insurance to a new owner, the documents required, timelines, and why this step matters for both the buyer and the seller.
What Is Car Insurance Transfer?
Car insurance transfer means shifting an existing insurance policy from the previous owner’s name to the new owner’s name after a vehicle is sold. The policy does not end automatically when ownership changes. Instead, it must be officially transferred through the insurance company.
If the policy is not transferred, the new owner may face claim rejections or legal trouble in the event of an accident.
Why Is Car Insurance Transfer Important?
Transferring insurance is essential for three main reasons:
- Legal compliance: Driving without valid insurance in your name is illegal.
- Claim eligibility: Insurance claims can be rejected if the policy is still in the old owner’s name.
- Financial protection: A transferred policy provides coverage for accidents, theft, and third-party liability.
Choosing the best motor insurance becomes meaningful only when the policy correctly reflects ownership details.
How to Transfer Car Insurance to a New Owner in India
Understanding how to transfer the insurance of a car to a new owner is simple when broken into steps.
Step 1: Complete Vehicle Ownership Transfer
First, the buyer and seller must transfer ownership through the Regional Transport Office (RTO). This includes:
- Submitting Form 29 and Form 30
- Updating the Registration Certificate (RC)
An insurance transfer cannot be completed without proof of ownership.
Step 2: Inform the Insurance Company
The new owner must notify the insurance company within 14 days of purchasing the car. This step is mandatory.
Most insurers allow online requests, making it easier to understand how to transfer car insurance to a new owner digitally.
Step 3: Submit Required Documents
The insurance provider will ask for the following:
- Copy of updated RC
- Insurance policy copy
- Sales agreement or delivery note
- KYC documents of the new owner
- Vehicle inspection report (if required)
Some insurers may inspect the car before approving the transfer.
Step 4: Pay Transfer Fees
A small endorsement fee is charged for transferring the policy. Once paid, the insurer issues an endorsement confirming the change in ownership.
What Happens to No Claim Bonus (NCB)?
The No Claim Bonus belongs to the seller, not the vehicle. It does not transfer to the new owner.
The seller can retain the NCB and apply it toward a new car insurance policy for another vehicle. The buyer starts with a fresh NCB record.
Transferring Third-Party vs Comprehensive Insurance
- Third-party insurance automatically transfers to the new owner but must still be endorsed.
- Comprehensive insurance requires formal approval and inspection by the insurer.
If the buyer wants broader coverage, upgrading to the best motor insurance after transfer is often a smart decision.
What If Insurance Is Not Transferred?
If insurance is not transferred within 14 days:
- Claims may be rejected
- Legal responsibility may still lie with the seller
- The buyer may have to purchase a new policy
Timely action avoids unnecessary disputes and financial risks.
Can the New Owner Buy a Fresh Policy Instead?
Yes. If the existing policy is close to expiry or does not meet coverage needs, the buyer can purchase a new car insurance policy rather than transferring the old one. However, third-party insurance must remain uninterrupted.
Common Mistakes to Avoid
- Delaying the insurance transfer process.
- Assuming insurance transfers automatically.
- Forgetting to update personal details.
- Ignoring vehicle inspection requests.
Being aware of these mistakes helps ensure a smooth transition.
Conclusion
Knowing how to transfer the insurance of car to a new owner is essential whenever a vehicle changes hands. The process is simple, cost-effective, and legally required. Completing the transfer on time ensures proper coverage, claim eligibility, and peace of mind.
Whether you continue with the existing policy or upgrade to the best motor insurance, make sure your car insurance accurately reflects your ownership.
