Transferring Insurance While Buying a Pre-owned Or Second-hand Vehicle

Over 2 crore second-hand two-wheelers and more than 40 lakh pre-owned cars are sold in India every year. Owning a vehicle, be it a used car, bike, or scooter remains a high priority for most aspirational individuals in our country.

We could be in the midst of an economic downturn; however, the pandemic-induced fear of travelling in public transport has only pushed the demand for low-cost private mobility. That’s where pre-owned or second-hand vehicles come in handy!

The growing acceptance of purchasing used automobiles is undeniable, and there are strong arguments in its favour. On most occasions, sufficient attention is paid towards getting the vehicle examined and evaluated to verify the health of the engine or its associated parts.

Transferring the registration certificate [RC] to the new owner’s name is also a mandatory step. Evidently, not enough urgency is shown by buyers or sellers when it comes to a timely-transfer of motor insurance. A seemingly-harmless miss can often lead to undesirable consequences.

The numerous benefits, apart from the legal-compulsion, of holding valid motor insurance are well-known. That being said, do you know that your insurance is only binding if the name and address on the RC and the policy document are the same?

Let’s define the vehicle insurance transfer process, and determine why as a buyer or seller you must transfer the insurance during a change of ownership. We’ll also explain the complete motor insurance transfer procedure.

The Vehicle Insurance Transfer

  • It is the formal process of transferring motor insurance from the existing/previous policyholder to the new buyer, who now holds the ownership rights to the two-or-four-wheeler.
  • Can be described as the withdrawal of one party from a policy contract and admission of another.

Why Every Buyer & Seller Should Transfer the Car, Bike or Scooter Insurance Policy?

  • Legal requirement as per Section 157, The Motor Vehicles Act.
  • It mandates the buyer to get motor insurance transferred in his/her name within 14 days.
  • On failing to do so, the insurer cannot be held liable for any losses incurred by the new vehicle owner.
  • In case of accidents, claims for damages to the vehicle or third parties can be rejected by the insurance company.
  • Courts may send a notice to the previous owner or seller asking to compensate for losses to third parties, for accidents caused by the buyer.
  • The seller can retain the NCB (No-claim bonus) and carry forward the benefits by successfully transferring their vehicle’s RC and insurance policy to the new owner.

The How Part, Steps Involved & Documents Needed

  • Submit filled-up RTO-acknowledged forms 29 and 30 (29 for seller/30 for the buyer) duly signed by the seller with previous motor insurance copy and NOC, or the RTO receipt and evidence of sale, to the vehicle insurance provider.
  • A nominal charge of approximately 50 rupees could be levied for processing.
  • The endorsement of transfer will then be initiated.
  • Submitting the new RC copy once issued by the RTO can help avoid minor challenges at the time of claim.

Please note, any motor insurance claims are only admissible when there is a legitimate contract between the insurer and the new owner or buyer.

If a change of vehicle ownership does not get reflected in the RC copy even after the motor insurance transfer, or the proof for the same is not submitted to the insurer, then during a claim, you can provide the evidence of RC transfer and get the claim.

Transfering motor insurance while buying or selling a new vehicle is a critical step and cannot be ignored. It equally impacts both the previous and the new owner, potentially resulting in financial costs and legal hassles. Therefore, no matter which second-hand car, bike or scooter you choose, stay smart and vigilant to make sure the motor insurance policy gets transferred at the earliest within the stipulated timeframe.

Motor insurance not only protects your vehicle and hard-earned money but also ensures peace of mind. With Quickinsure, compare policies from all the top insurance companies in India and instantly opt for a suitable cover for your ride.

Sources: IRDAI, Federation of Auto Dealers Association (FADA), Industry Research,, General Insurance Council, Cars24,,,, Mordor Intelligence, Economic Times,,,,,,,, Wikipedia, YouTube and other information channels.

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