How To Transfer Car Insurance From Your Name After Selling The Vehicle
Team CARS24
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5 mins

How To Transfer Car Insurance From Your Name After Selling The Vehicle

Team CARS24

In our previous vlog, we told you in detail about things that are not included in Comprehensive Insurance. In the latest episode, we discuss in detail another important aspect, which is the transfer of car insurance on selling the used vehicle.

There has been a rapid increase in the demand for used or second-hand cars in India. However, you can’t be further from the truth if you believe that the hassles end at simply finding the right buyer who is willing to pay the desired amount for your car. The ownership transfer of a vehicle is among the most important factors when it comes to the sale and purchase of a used vehicle. Moreover, one should always ensure that the car insurance policy is transferred from your name to that of the new owner.

Why is it important to transfer car insurance?

It is imperative to make sure that the car insurance policy is transferred from the original owner’s name to that of the buyer. Sanjay Saxena, Head, Motor Underwriting & Motor Claims, Bajaj Allianz General Insurance says that the buyer of a used car should immediately initiate the insurance transfer process on obtaining all the documents of the purchased vehicle. The car insurance transfer process can be carried out by the buyer at the office of the insurer. He explains-

The liability portion of the policy is deemed to be transferred automatically; however, the own damage cover is no longer valid once the policy is transferred in the name of the new owner,.

What this means is that in case the vehicle is held liable for causing damage to a third party, the latter will be entitled to benefit from the claim. However, as the new owner, you won’t be able to make any sort of personal claim as it will be deemed invalid. So, basically, while your used vehicle stays road legal even if you do not transfer the insurance policy in your name, not having the policy in your name might prove disadvantageous to you.

See Also – Can I Sell My Car Without Insurance Cover? – We Explain!

What are the documents required for the transfer of car ownership?

When selling your vehicle, make sure you follow the proper documentation process to ensure you don’t have any future liabilities associated with the vehicle. Devendra Rane, Founder & CTO, says that the entire process can be made really easy if you divide the entire procedure into two parts – Transactional and RTO.

How To Transfer Car Insurance From Your Name After Selling The Vehicle Image | Cars24

Transactional Documents

As soon as you finalize a deal with a prospective buyer, you should obtain signatures of the buyer on a sale affidavit and a delivery note. Furthermore, you should attach copies of the buyer’s identity proof, which could be a passport or a PAN card, address proof like Aadhar Card and the cheques through which the buyer makes the payment to you. Also, the sale affidavit should be notarized after it’s signed by the buyer. Basically, all of it acts as an agreement of transfer of all liabilities related to your used car to the new owner.

Also Read – How to remove Hypothecation from car RC book 

RTO Documents

Following are the RTO documents that are required for car ownership transfer –

  • Form 28 – Basically, Form 28 is an application for obtaining a NOC from the registration authority and even does the job of acting as a proof that you no longer hold any liabilities that might prevent you from selling your vehicle.
  • Form 29 – This document is basically a notice of transfer of ownership of the vehicle by the original owner (seller) to the RTO. It also means that the seller has handed over all the vehicle documents, viz. Registration Certificate, Vehicle Insurance, PUC certificate to the buyer.
  • Form 30 – This document acts as a confirmation to Form 29 that a transfer of ownership of the vehicle needs to be done and that all the legal liabilities of the vehicle are also now transferred to the buyer of the used car.
  • Clearance Certificate – This is basically a simple application made on a plain sheet of paper to inform the RTO that the car has been sold. This certificate has the details of the seller, buyer, and the vehicle.

Once you have received the agreed amount for your vehicle and have obtained the signature on the aforementioned documents, you can safely hand over your car to the new buyer along with its Registration Certificate, car insurance policy document, PUC, Invoice of the Vehicle, Application of Insurance Transfer and original and duplicate vehicle keys.

See Also – Top 5 Things to be Careful When You Are About To Sell Your Car

Transfer of the car insurance policy

As we said, it is very important that you transfer the car insurance from your name as soon as the vehicle is sold off. However, the No Claim Bonus accumulated in your comprehensive insurance policy should be transferred to your name by letting the insurer know about the sale of your car. This No Claim Bonus can be used for your new vehicle, while the transfer of the insurance policy will help you avoid any legal issues that might affect your old car in future. Speaking on this, Sanjay Saxena, Head, Motor Underwriting & Motor Claims, Bajaj Allianz General Insurance has said-

“After the transfer of vehicle ownership with an existing insurance policy, the new vehicle owner need not have to take another fresh policy. He/she just need to inform the insurance company regarding the transfer of ownership, by producing the necessary documents as mentioned above to initiate the transfer. Post verification of the documents, and with a nominal transfer charge, the insurance company shall issue an endorsement regarding the change of ownership.”

To make the entire process stress-free, the ownership transfer and the change of name in the car insurance policy can be done at the same time. As per the Insurance Regulatory and Development Authority of India, in case of filing an insurance claim, the name and address on both the registration and insurance documents have to match. Hence, car insurance transfer is beneficial for the new owner as he can recover the cost of damage easily. After paying a transfer fee of Rs 50, the buyer needs to produce the submit the following documents for insurance transfer process-

  • New copy of the registration certificate/form 29.
  • Old policy document
  • No Objection Clause (NOC) from the previous policyholder
  • New application form
  • Inspection Report from the insurance company
  • No Claims Bonus difference amount

Also Read – How to Get NOC from RTO – Step-by-Step Guidelines

On receipt of all the documents, the insurance company validates the transfer of the cover. It is important to make sure that you initiate the transfer process within 14 days of purchase.

Are you planning to sell your car? We, at CARS24, can give you a good price for your second-hand vehicle and even take care of the RC transfer, free of cost! Visit us at or call us @ 1800 258 5656 to sell your car in 1 visit.

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