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

Aarshi Ray
Aarshi Ray

Updated on: 21st April, 2024 IST

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

Selling an old car can often feel like letting go of a trusted companion. However, it is equally important to ensure that your four-wheeled buddy is taken care of at their new home. When selling a car, you transfer everything from the Registration Certificate (RC) to your car’s insurance policy to the new owner.

If you’re ready to sell your car and transfer the insurance to the buyer, we’ve created a handy guide for you to do so seamlessly! 

Why do you need to transfer your car insurance?

Transferring your car insurance is a crucial step when selling your car. Here’s why:

  1. Legal compliance: You are legally required to have car insurance in India. However, when you sell your car, the insurance becomes invalid because you’re no longer the owner of the vehicle.
  2. Protection for the buyer: Transferring car insurance protects the new owner from third-party liabilities, accidents, and potential damage.
  3. Continued insurance benefits: If you transfer your car insurance, the new owner will be able to enjoy the same benefits as the new policyholder. This may also result in lower premiums for future renewals.
  4. Compliance with the lender: Lending institutions require you to update your details in case there’s any change in ownership of the vehicle.

How to transfer car insurance from one person to another in India?

Transferring the ownership of a vehicle also involves transferring the insurance policy to your name. It is advisable for the buyer to take the initiative to ensure their vehicle is covered by a motor insurance policy. 

However, according to the regulations set by the transport department, it is the seller's responsibility to facilitate the transfer of the car insurance to the buyer.

The process of transferring automobile insurance is generally straightforward. Before starting the process, it is important to gather the necessary documents for transferring the title when buying a second-hand vehicle:

  • Registration Certificate: Ensure you have the original copy of the vehicle's Registration Certificate (RC).


  • Bike or Car Insurance Policy: Obtain the original insurance policy document from the seller.

Once you have the required documents, follow these steps to transfer the vehicle insurance to your name:

  1. Visit the respective Regional Transport Office (RTO) website or office and download Form 28, Form 29, and Form 30.
  2. Fill out the forms accurately with the necessary details. Make sure to provide your contact information and the vehicle's details.
  3. Submit these forms at the nearest RTO along with any additional documents required (if any). These additional documents may vary depending on your specific RTO, so it's best to check their requirements beforehand.
  4. Once you have submitted the forms, the RTO will process them and provide a Clearance Certificate. This certificate serves as proof of the sale and the completion of the necessary formalities.
  5. Take the Clearance Certificate and all the relevant documents to the insurance company from whom the policy was issued. They will require these documents to initiate the transfer process.
  6. If there are any fees associated with transferring the insurance policy, ensure they are paid to the insurance company as per their instructions.
  7. After completing the necessary formalities and paying any fees, you will receive the insurance policy in your name. The policy document may be sent to you via email or delivered to your address through a courier service.

CARS24 Expert Tip: Remember to keep copies of all the documents and communications related to the insurance transfer process for future reference.

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

What are the documents required to transfer insurance and ownership?

To facilitate the transfer of vehicle insurance, you need to submit the following documents along with the application to change the ownership of the car or bike insurance:

  1. Original Registration Certificate (RC): Provide the original RC document of the vehicle.
  2. Receipt from the RTO: Submit the receipt obtained from the Regional Transport Office (RTO) for Forms 28, 29, and 30.  
  3. No Objection Clause (NOC): Obtain a No Objection Clause (NOC) from the previous owner of the vehicle.  
  4. Address Proof: Submit a valid address proof document of the buyer.  
  5. Passport Size Photographs: Include passport-size photographs of the buyer.  
  6. Old and Active Insurance Policy Document: Provide the original copy of the existing insurance policy document. This proves that the vehicle is currently insured.
  7. Insurance Company Inspection Report: In some cases, the insurance company may require an inspection report of the vehicle. This report is typically conducted by the insurance company to assess the vehicle's condition and determine its insurability.

Also Read – How to remove Hypothecation from car RC book 

What is No Claims Bonus in Transfer of Car Insurance?

If you, as the seller, have not made any insurance claims during the policy period, you are eligible for a No Claim Bonus (NCB). The NCB is a discount on the premium when you renew the vehicle insurance policy. 

It is provided by the insurer as a percentage and increases with each claim-free year. It is important to note that the NCB is specific to the owner of the vehicle and cannot be transferred to another individual. Therefore, as the buyer, you cannot directly benefit from the NCB accumulated by the previous owner. However, as the seller, you have the option to transfer the NCB to a new insurance policy that you may obtain.

Here’s a glance at the NCB rate grid:

No Claim Bonus Rate Grid%
After one claim-free year0.2
After 2 consecutive claim-free years0.25
After 3 consecutive claim-free years0.35
After 4 consecutive claim-free years0.45
After 5 consecutive claim-free years0.5

Can No Claim Bonus be transferred to the new car owner?

No, the No Claim Bonus (NCB) cannot be transferred to the new car owner. The NCB is a discount offered by the insurance company to the policyholder for not making any claims during the policy period. It is a reward for the policyholder's good claim history. 

Since the NCB is specific to the policyholder and not the vehicle itself, it cannot be transferred to another individual, including the new car owner. Each individual builds their own NCB based on their claim-free years and it is not transferable.

What happens if the vehicle insurance transfer is incomplete?

If the transfer of the vehicle insurance policy is incomplete, there can be several consequences as per Section 157 of the Motor Vehicle Act. It is the seller's responsibility to transfer the insurance policy to the buyer's name within 14 days of purchasing the vehicle. 

However, it's important to note that only the third-party section of the policy is automatically transferred, while coverages such as Own Damage Insurance (OD) and any Add-ons (if applicable) are not transferred automatically.

If the transfer of the insurance policy is not completed, the following implications may arise:

  • Loss Coverage: If you, as the new owner, fail to transfer the vehicle’s insurance policy to your name, the insurer is not liable to cover any losses you may sustain. This includes both the third-party coverage and the own damage sections of the policy.
  • Liability for Third-Party Compensation: In the event of an accident caused by the new owner, where the insurance policy has not been transferred, the court may send a notice to the previous owner. The previous owner may be held responsible for compensating the third party for any losses incurred.

To avoid these potential issues, it is crucial to ensure the timely and complete transfer of the insurance policy to your name as the new owner of the vehicle. This will help safeguard your interests and ensure that you have the necessary coverage in case of any unfortunate events or accidents.

Who is responsible for transfer of car insurance policy?

As per the regulations set by the Insurance Regulatory and Development Authority of India (IRDAI), the responsibility for transferring the car insurance policy lies with the seller of the vehicle. As the seller, it is your responsibility to initiate the process of transferring the insurance policy to the buyer's name.

You should contact the insurance company and inform them about the sale of the vehicle. You also need to provide the necessary documents, such as the sale agreement, the buyer's details, and the buyer's address proof, to facilitate the transfer process. The insurance company will then guide you through the required steps and documentation for transferring the policy.

Once the transfer process is initiated, the insurance company will verify the documents and complete the transfer of the car insurance policy to the buyer's name. The buyer should ensure that they receive the updated policy documents and confirmation from the insurance company about the transfer.

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

Bottom Line

Transferring your car insurance is as important as transferring your vehicle’s Registration Certificate (RC) because it is a legal mandate in India. If you’re selling your car, you must transfer your existing insurance to the new owner (buyer). 

So, if you need help with understanding how to transfer car insurance from one person to another, our guide is designed to assist you from start to finish!


Q. Can third-party insurance be transferred? 

Yes, the third-party insurance section of the policy is automatically transferred to the new owner when the vehicle ownership is transferred. The third-party insurance coverage remains intact for the new owner.

Q. Is NOC required for bike ownership transfer? 

Yes, there are different types of No Objection Certificates (NOC) required for the transfer of two-wheeler ownership. Form 28, which acts as an NOC from the seller, is a mandatory document during the transfer process. 

Additionally, if the transfer is happening between different states or Regional Transport Offices (RTOs), an NOC from the respective state's RTO is required. If the vehicle was under hypothecation with the previous owner and the hypothecation has ended, an NOC from the respective bank is also necessary.

Q. Can I transfer the NCB benefit to the buyer? 

No, the No Claim Bonus (NCB) benefit cannot be transferred to the new owner of the vehicle. The NCB is associated with the policyholder's claim history and cannot be transferred to another individual. However, as a seller, you can utilize the NCB benefit if you decide to purchase an insurance policy from a new insurer.

Q. How long do I have to transfer car insurance after selling my car?

After selling your car, it is recommended to transfer the car insurance policy to the buyer's name within 14 days. It is the responsibility of the seller to initiate the transfer process and inform the insurance company about the sale. 

Promptly transferring the insurance policy ensures that the new owner is properly covered and avoids any potential gaps in insurance coverage.

Q. Do I need to notify the insurance company about the sale before transferring the insurance in India?

Yes, it is important to notify the insurance company about the sale of your vehicle before transferring the insurance policy to the new owner in India. As the seller, you should inform your insurance company about the change in ownership and provide them with the necessary details of the buyer.

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