Two Wheeler Insurance

Is It Possible to Sell Your Two Wheeler Without a Valid Two Wheeler Insurance Policy?

By Admin
Apr 26, 2021

Though two wheelers are the most efficient mode of transportation for avoiding congested areas, two wheelers are more prone to road accidents than other vehicles due to the poor state of Indian roads. It is important to not only purchase a comprehensive insurance policy for your two wheeler (bike or scooter), but also to upgrade it on a regular basis to ensure continued safety from accidents and other hazards. A conventional two wheeler insurance policy protects your two wheeler from a variety of hazards and risks.

After a certain period, people feel compelled to sell their old two wheelers and replace them with newer models, or to buy a four wheeler instead. Some people also decide to sell their two wheeler because they are moving to a new location where the vehicle would not be needed. There are, however, strict laws prohibiting sale of two wheelers without a valid insurance plan. This is because selling your two wheeler entails a change of ownership. 

Is It Possible To Sell Your Two Wheeler Without A Valid Two Wheeler Policy?

Although it is required by law to purchase two wheeler insurance, most people are unsure what to do with the policy when they sell their vehicle or pass ownership to someone else. A policyholder must understand that the sale of their two wheeler involves a change of ownership of the vehicle and thus, it cannot be sold without a valid insurance policy or informing about the same to the respective RTO (Regional Transport Office). Please note that every two wheeler owner in India is required to have at least a third party two wheeler insurance to avoid legal penalties which include a fine of INR 2,000 and/or imprisonment of up to 3 months. 

Reasons Why It Is Important To Have A Valid Two Wheeler Insurance Policy While Selling A Two Wheeler?

Following are the reasons why is it necessary to have a valid two wheeler insurance policy at the time of selling your two wheeler - 

1. Ownership Transfer: The ownership transfer of a two wheeler is a legal process that transfers all of the vehicle's assets to the new owner. The ownership transfer process also includes procurement of required documents such as Registration Certificate (RC), Pollution Under Control Certificate (PUC), Non-Objection Certificate (NOC), Insurance Document etc. According to the recent rules for motor vehicles, motorcycle ownership must be transferred during operation. So, driving a two wheeler without a transfer of ownership attracts a penalty of INR 2,000.

2. Insurance Requirement: According to the most recent motor vehicle regulations, any vehicle riding on Indian roads must have at least a valid third party insurance policy. The RTO will not report your two wheeler if you do have an insurance policy. As a result, getting the two wheeler's insurance certificate from the seller before signing the contract is important. You should contact the insurance provider to pass ownership to yourself once you receive the certificate from the seller. If your policy has expired, don't worry; you can either renew it or purchase a new two wheeler insurance policy for your used motorcycle.

3. Interim Period Before Actual Sale: While the second-hand two wheeler market has made selling a two wheeler easy and convenient, it is not always feasible or profitable to sell your two wheeler in one go. You may want to consider a few customers, see where you can get the best deal, and then sign the contract. All of this could take a long time. During the Interim period of sale, you are liable to pay for any damages due to an accident and not the buyer. And if you plan on riding the two wheeler during this period, you'll need to insure it to remain on the right side of the law and protect yourself from financial risks resulting from bike accidents and other unforeseeable events.

In February 2020, Mr. Verma put up an advertisement for the sale of his two wheeler which he had purchased nearly 2 years ago. Since he planned to sell his two wheeler he decided not to get his two wheeler insurance policy which was due for renewal on 15 February. However, on February 20, he had to go to a hospital immediately to see one of his relatives who had met with an accident. So, he quickly took his bike and went to see him. However, on his way from the hospital, he was stopped by the traffic policy for a regular checking of the documents. Since, he was riding the bike without an active two wheeler insurance policy, he was penalised with a fine of INR 2,000.

4. Legal Requirement: As per the Indian Motor Tariff, all two wheeler owners are mandatorily required to have a minimum of third party two wheeler insurance, the absence of which is punishable by a fine of INR 2,000 and/or imprisonment of up to 3 months. Thus, it is important to have a valid two wheeler insurance policy at the time of selling a two wheeler to avoid legal penalties.

Conclusion

Once you have decided to sell your two wheeler, make sure you complete all of the required paperwork for two wheeler ownership and insurance transfer. You must ensure that the bike and its liabilities are transferred from you to the new owner. The method of transferring two wheeler insurance from one policyholder to another is straightforward and clear. As a result, there is no reason to avoid transferring the insurance of your two wheeler. It is important to do so because it will shield you from any legal problems related to the sale of your bike.

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