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Buying A Used Car Without Insurance Transfer Could Be Risky!

By Vikas Chandra Das
21 July 2022, 11:46 AM

The used-car market has never seen such a surge in all these years as it’s witnessing now. Millions of people are buying used cars on a yearly basis. This is mainly because of the fact that more and more people are turning to this budget-friendly option. More middle-class people are realising the dream of owning a car, and more upper-middle-class people are realising the dream of owning a luxury car.

Amidst all the excitement of owning a car, one mustn’t forget about transferring the insurance to your name. Never forget that along with the registration certificate (RC) of the car, you should also transfer the car insurance to truly complete the buying process. Buying a used car without insurance can surely turn out to be a risky affair, as owning insurance is mandatory.

How does the Insurance Transfer Occur for a Used-car?

The transfer of the insurance of a used car to the new owner is a simple process during which you need to fill certain forms and submit documents. Here is a step-by-step guide for the same.

  • Download Form 28, 29, and 30 from your city’s RTO’s website or directly visit the office to get the form.
  • Fill in all the necessary details and submit the relevant documents.
  • Ensure that you have a clearance certificate from the RTO and the previous owner.
  • Now, submit all the relevant documents to the car insurance company.
  • Make the fee payment.
  • You can now receive the insurance papers with your name on them in your e-mail or via post.

The following are the documents required for this process.

  • Original Registration Certificate.
  • Receipt from the RTO, regarding your Form 28, 29, and 30 getting cleared, along with the proof of sale. Note that the receipt should have the signatures of both the seller and buyer.
  • NOC from the previous owner.
  • Address proof of the buyer.
  • Buyer’s passport size photos.
  • Documents of the old and the present insurance.
  • Inspection report of the car issued by the insurance of the company.

What If the User's Car Policy isn’t Expired?

If the user's car policy isn’t expired, it should be transferred to the new buyer because that policy is still valid. Once the insurance is transferred, the new owner will continue paying the premiums. However, the NCB will remain with the previous owner.

Should You Change Your Insurance Provider While Buying a Second-hand Car?

It depends on the existing car insurance policy. If it aligns with the expectations and benefits you want from car insurance, then you can continue with the same. However, if you feel that it does not provide the necessary cover or the premiums are too high, then you can most certainly change the insurance provider.

What Factors Should You Consider Before Finalising on Insurance for a Used-car?

  • IDV: Insured Declared Value is the assured sum that you will get if your car is completely damaged or gets stolen. Some insurance companies provide better offers, so you may compare that and then decide the one you want.
  • NCB: No Claim Bonus is something that you should definitely consider while buying insurance, especially if you are someone who is not likely to make a claim. Nonetheless, make sure that the company provides a Car insurance NCB cover as well so that you can continue enjoying the benefits even if you make a certain number of claims.
  • Any discounts on offer are based on the:
    • Premium – Look for any discounts on premiums that you can get, citing your previous driving records and credit scores.
    • Anti-theft device– If your car has anti-theft devices installed, then you can easily get some discounts on premiums.
    • AAI membership – If you are a member of any of the Auto Associations of India, you can get a discount of INR 500 on the premium.
    • Voluntary deductibles: if you are ready to pay more voluntary deductibles, then you will get discounts on premiums.

Can You Transfer the NCB?

As a buyer, you cannot transfer the NCB of an insurance policy of a previous car because it belongs to the owner and not the car. As the original owner of the policy, one can transfer the NCB to a new one that you buy. This is the process you must follow:

  • Get in touch with your old insurance provider.
  • Put in the request for the transfer and submit all the documents.
  • You will get the NCB certificate.
  • Submit the NCB certificate to the new insurance service provider.
  • The new provider will transfer and attach the NCB to the new policy plan.

Documents Required for the Transfer Process

  • Transfer application.
  • Car insurance’s copy.
  • Buyer-seller agreement (Forms 29 & 30).
  • In case of sale of an old car, copy of transferring RC.
  • NCB certificate.

In conclusion, we would like to say that you should never buy a used car without transferring the insurance of the same. You should do this in tandem so that you can start driving the car as soon as you buy it from the previous owner. Note that you only have 14 days to complete this process (from the time of purchase) before the insurance company can possibly reject the request! 

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