Car Insurance Transfer from One Person to Another

Purchasing a car second-hand car requires a lot of effort and good decision-making. Whether it fits your budget, kilometers covered by it, car model year, all the documents in place or notas well as getting the insurance policy transferred to your name. Apart from the buyer, the seller has to equally ensure that he is transferring all the documents to the buyer’s name as there have been many cases when the new owner of the used car raised a claim and got to know that the insurance policy was still in the name of the previous owner of the car.

Also, according to the insurance policy, the Registration certificate commonly known as RC and the insurance policy should be in the same owner’s name. Many people who are not aware of this condition end up in a financial loss in an unforeseen incident. So, read on to understand properly about transferring car insurance from one person to another.

How to Transfer Car Insurance?

Car Insurance

When the owner handover the car to you, the second thing you need to take care of is to get the insurance transferred to your name. It is mandatory by law to cover your car under a car insurance policy. However, when you are purchasing a second-hand car, it is the seller’s responsibility to make sure to transfer the car insurance to your name. So, let us tell you how to transfer the car insurance policy to your name?

  • Download Form 28, 29 and 30 from the RTO website or get it from the office physically.
  • Fill the form properly and submit it to the RTO office.
  • Attach the required documents if any.
  • Make sure to take the Clearance Certificate from RTO.
  • Submit the documents to the insurance company.
  • Pay the fees if any.
  • Collect the policy from the RTO with your name on it.

Documents Required to Transfer Insurance

To get the insurance policy transferred to your name you need to have the following documents along with the application form:

  • Original Registration Certificate (RC)
  • No Objection Clause (NOC)
  • Buyer’s address proof
  • Buyer’s passport size photo
  • Insurance policy documents
  • Inspection report (Done by Insurance company)

Why is it Important to Transfer the Insurance Policy?

According to the insurance company, the insurance is attached to the particular car but not to the owner. So, when you purchase a second-hand car, it is important to get the insurance policy transferred to your name along with the car. So, why is it important to transfer the insurance policy?

· No Future Liability

When you purchase a second-hand car, you need to get the insurance policy transferred to your name. In case you meet an unforeseen accident with your second-hand car and damage the third-party car that makes you liable for their damage and loss and you don’t have the insurance policy in your name. In this scenario, you won’t be eligible to get the third-party claim and you will have to pay for the damages and loss of the thirdparty out of your pocket.

Also, as a seller, if you do not transfer the insurance policy to the new owner then you will have to pay for the third-party damages as you are still the policyholder of your sold-out car.

· Retain No Claim Bonus

For every claim-free year, you become eligible for the benefit of No Claim Bonus, in-short for not raising a claim you get a percentage of discount on the premium when you renew the policy. So, when you sell your old car and purchase a new one and get that new vehicle insured, you need to get the No claim bonus reward transferred to the new car insurance policy. For this, you have to inform the insurance company about selling your old car. Until and unless you transfer the ongoing car insurance policy to the new owner, you cannot obtain the NCB certificate.

No Claim Bonus & How it Works?

When the car owner does not raise any claim throughout the policy tenure, he/she becomes eligible for a certain percentage of discount in the premium rate for the next year after renewing the policy. No claim bonus is provided by the insurance company and it increases every year for not raising a claim.

The NCB is offered to the owner of the policy for not raising any claim but it cannot be transferred like the insurance policy. Hence as the second owner of the car, you cannot get the benefit of NCB. But the car seller can transfer the NCB to the new policy. Here is a list of NCB rate:

Claim Free Year Rate
After 1 Claim free year 20%
After 2 Claim free year 25%
After 3 Claim free year 35%
After 4 Claim free year 45%
After 5 Claim free year 50%


Make sure that you transfer the insurance policy to the new owner’s name so that you are not liable for any future instances. Also, you will only be eligible to avail of the benefits of No claim bonus when you transfer the insurance policy to its new owner’s name. You might have to pay for the third-party liabilities in case you do not transfer the insurance policy and the new owner of the car meets an accident and damages a third-party vehicle.