Transfer of car insurance: All you need to know
As per Motor Vehicles Act, it is mandatory for both parties to transfer car insurance policy within 14 days from the date of purchase.
Due to Covid-19 pandemic, now more and more people are preferring personal mobility to avoid crowded public transport and maintain social distance. But buying a new car is often an expensive matter for many people. While, in the past few months, car manufacturers have hiked vehicle prices, the demand of second-hand cars has grown rapidly. If you decide to purchase a second-hand car, do not forget to transfer the car insurance policy from the previous owner to your name. It is an important process just like transfer of car registration certificate during the shift of ownership. Many people assume that as long the car insurance policy bought by previous owner is active, the vehicle is covered and there is no need to transfer it. This is a wrong presumption.
The Motor Vehicles Act states that it is mandatory for both parties to transfer car insurance policy within 14 days from the date of purchase. In case of third-party car insurance, the coverage is automatically transferred upon purchase and remains active for those two weeks. If it is a comprehensive car insurance, only the third-party component of the policy is transferred upon purchase.
If the buyer fails to transfer the car insurance policy within the 14-day period, the automatic third-party cover transfer will be invalid.
Significance
All of us are aware of the importance of a car insurance. Apart from being a legal obligation, having car insurance has its benefits. It can provide financial assistance in case there is a damage or an accident. If you do not transfer the existing insurance on your pre-owned car to your name, you will not be able to make any claims. As a result, you will have to pay your third-party liabilities from your pocket.
It might also create legal problems in case of any accident.
Required documents
After the transfer of the car ownership, you can transfer car insurance as well. The insurance company may ask for the some documents to transfer the car insurance. These documents include:
— Application for transfer of ownership
— Original registration certificate (RC) with the name of the new owner
— Old insurance certificate
— The required fee, if any