How To Transfer Car Insurance To Another Person?

How To Transfer Car Insurance To Another Person? Any loss or damage to a vehicle, including a car, a two-wheeler, a commercial vehicle, etc., is covered by this insurance, which is more often known as motor insurance. The financial losses caused by collisions that harm the cars are reduced by this insurance. 

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The premium payments made by the person buying auto insurance depend on a variety of factors, including the insured stated value, type, age, fuel type, and age of the insured.

Why is Car Insurance Necessary?

When you buy or rent a car, you must make sure that your investment is protected. If you have auto insurance, you can feel secure if you are involved in an accident, your vehicle is stolen, vandalized, or damaged by a natural disaster. People pay yearly premiums to an auto insurance provider in order to avoid having to pay for car accidents out of pocket; the provider then pays all or the majority of the costs associated with an accident or other vehicle damage.

The idea of insurance is simple. To protect your asset from unlucky circumstances that could result in monetary losses, you pay a certain amount as an insurance premium. In return for the premium, the insurance provider guarantees to provide financial support in the event of several situations detailed in the policy’s terms and conditions. When one delves more into scenarios, lingo, and claim-related questions, problems start to emerge.

The Indian vehicle insurance sector has undergone some positive improvements in recent years. Digitization is the most notable of them all. The emergence of contemporary, digital insurance companies has simplified insurance.

Why it is Important to Transfer Car Insurance

According to the rules and conditions of any insurance provider, car insurance is connected to a particular vehicle, not the owner of the car. This means that when the car is transferred to a new owner (sold), the insurance must also be transferred. Transferring car insurance is essential for the following two reasons:

1- Protection From Future Potential Liabilities: Both the buyer and the seller of the vehicle may be impacted by car insurance transfer concerns. For instance, if a person buys a used automobile without transferring the insurance, they will not be able to claim their third-party insurance and will be liable for paying any third-party responsibilities on their own. Similarly to this, if a person sells their car without transferring their auto insurance, they may be liable for any harm to third parties the new owner of the car does.

2- To Retain the No-Claim Bonus: The insurance company will give a policyholder a No-Claim Bonus, which is a decrease in the premium owed at the time of the policy’s renewal if they have maintained a claim-free record throughout the policy. With this discount, which increases annually without a claim, one may get up to 50% off. 

It is unfair to transfer the NCB while modifying the policy. As a reward for filing no claims, the policyholder receives this discount, which cannot be used by another person. Once the policy is transferred, the previous policyholder can get an NCB retention letter from the insurer and use this benefit for a new car insurance policy.

How to Transfer Car Insurance to Some Other Person

Selling a car is challenging enough, but you should know that in the case of selling the car, it is very essential to transfer the car insurance you have on it. Here is some advice you should consider while transferring your car insurance. 

Just keep in mind that these quick requirements must be completed as soon as possible to ensure a smooth transfer of ownership. The first thing you should be aware of when you are selling your car is necessary that your car insurance will also move to the new owner. You must provide your insurer with the following paperwork to transfer auto insurance from one individual to another:

  • Original RC
  • (New RC copy) Form 29, 30
  • Old insurance documents 
  • NOC from the prior policyholder
  • Application – from the buyer and seller with their signatures as proof of sale
  • The inspection report from a new insurance carrier –
  • NCB discrepancy amount
  • Address proof of the buyer
  • Passport-size Photograph of the buyer

Steps For Transfer of Car Insurance

  • Download Forms 28, 29, and 30 from the website or office of the relevant RTO.
  • Complete the form and send it, along with any necessary documentation (if any), to the RTO.
  • Take the RTO’s Clearance Certificate as proof of the completed forms and the sale.
  • Send the insurance company all the necessary documents.
  • Pay the necessary fee, if one is due.
  • Receive the insurance policy displaying your name through email or courier.

Insurance Transfer and No Claim Bonus (NCB) 

NCB plays a significant role in the transfer of motor insurance. While switching your auto insurance, you must keep in mind to save your no-claim bonus. For the previous owner of the insurance policy to be eligible for the NCB discount, you must give your insurer a letter of NCB retention together with your application. 

The NCB or no-claim incentives are not transferable. As a result, while you can transfer your car insurance, you cannot do so with the NCB. The following paperwork must be sent to the insurer to obtain a retention letter for No Claim Bonus:

  • Send an official letter asking the insurance to revoke the current coverage.
  • Submit the certificate, form 51, and the original copy of your auto insurance policy.
  • RTO form 29, which serves as a notice to transfer car ownership, must also be submitted.
  • In order to inform the insurance and transfer ownership, you must also file form 30 RTO, which serves as a written vehicle ownership transfer form.
  • A copy of the registration certificate book (RC book), on which the name of the new owner is noted, must also be submitted.
  • Additionally, you must provide the new automobile owner with documentation of the delivery of the vehicle.


The seller must change the insurance policy to the buyer’s name within 14 days of the sale, as required by Section 157 of the Motor Vehicle Act. The only part of the policy that is automatically transferred is the third-party clause, so please take note of that. The Motor Vehicle Act’s Section 157 states that the seller must transmit the buyer’s car insurance coverage within 14 days. 

The insurance company is not bound to make up for any losses suffered by the new owner if the seller neglects to transfer the car insurance policy to the buyer. As a result, make sure to transfer your auto insurance coverage on time and live a legally secure life.

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