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Looking to sell your existing car to get a new one? Do you know the process of transferring car insurance policy from one person to another? Learn here.
To change vehicle ownership is an integral part of the process of selling a car both the person selling the car as well as the one buying it. However, it is a fact that many of us do not have proper knowledge and clarity on a very important thing – transferring the existing car insurance policy. Let’s learn about the process in this blog.
First you must know whether you need to transfer car insurance at all while selling your car and if so, why?
You need a car insurance to protect your car from any unforeseen events and damages. So, when you sell your car, there is no point in having an insurance for that car. Thus, it is important to transfer the car insurance in the name of the new owner. If you are the buyer, just ensure to get the car insurance in your name.
Below are two other important reasons to transfer car insurance policy:
To transfer car insurance from one person to another, you need to submit the below mentioned documents to your insurer:
NCB is an important aspect of the car insurance transfer process. While transferring the car insurance, you must remember to retain your no claim bonus. For this, you have to apply to your insurer by submitting a NCB retention letter, which makes the previous owner of the insurance policy eligible to obtain the NCB discount.
No, the NCB or no claim benefits are non-transferrable. So, you can transfer your car insurance policy but cannot get the NCB transferred.
Below are the documents required to submit to the insurer to receive a retention letter for NCB:
You have seen that form 29 and 30 are very important documents required to obtain a retention letter for NCB transfer.
If the car insurance transfer process remains incomplete, you will not be able to make any claims for third-party damages if any such damage is caused due to an accident or collision.
In the event that uninsured automobile causes third-party damage, you will be legally responsible the losses from your own money.
The Motor Insurance Act makes it clear that it is the responsibility of the seller of the car to ensure that the current car insurance policy is transferred to the new owner. And the process should be done within 2 weeks of selling the vehicle.
Further, you must know that for the first 2 weeks of selling the vehicle, it automatically transfers the third-party insurance cover to the new owner and stays active too. However, this facility is not allowed for own damage coverage. So, to get Own Car Damage coverage, you have to wait for the transfer car ownership to be completely done. Additionally, if the transfer is not completed within the first two weeks, even the third-party policy gets dissolved.
Now you know how to transfer car insurance from one person to another. Also, you know why it is important to transfer car insurance in the first place. As such, when we invest in a new asset, it does require a lot of planning. So, it is important to go through all such processes of proper transfer of insurance papers etc. Hence, ensure to get such transfers done in a proper way to avoid any sorts of legal trouble. Here, form 29 30 RTO plays an important role in the transfer process.
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