All you need to know about the transfer of used car insurance in India

Every automobile owner knows that all vehicles plying on Indian roads need to be insured as per government regulations. It has been mandated for all prospective buyers of cars to purchase an auto insurance policy so that damages caused to the vehicle on the roads are compensated for.

Most car owners are aware of the basic car insurance policies offered by insurance providers in the country. However, not many know about the process of transferring car insurance in the event of sale or purchase of a used car. It should be noted that used car insurance can be effortlessly transferred to a new car or a new owner.

Transfer of used car insurance

Process of used car insurance transfer

In accordance to the guidelines set by the Insurance Regulatory and Development Authority of India (IRDA), the insurance of a used car should be moved to the new owner of the vehicle with 14 days from the date on which the registration was transferred. If this is not followed, no claim will be payable to the vehicle in case it has suffered from own-damage.

The documents required for the transfer of insurance are,

  • Old insurance policy
  • Copy of Form 29 or the new certificate of registration
  • No Objection Certificate (NOC) from the old owner of the vehicle
  • A new proposal form
  • Report of the inspection carried out by the insurance company
  • Fee for transfer, to be paid to the insurance provider. This will be between Rs. 50 and Rs. 100.
  • NCB recovery or the difference amount

Is it possible to change the insurance provider?

At the time of registration transfer, you can choose to either change the insurer or continue with the current one. With the competition in the market, various insurance providers are offering lucrative insurance policies and flexibility in coverages that can be availed of. So, this is a good time to weigh out your requirements and choose the most optimum plan for your car.

There are multiple neutral third party financial websites that offer user-friendly interfaces to compare and buy the most appropriate policy for your needs. They also provide excellent post-sale service and have dedicated teams that assist in resolving claim-related issues.

Points to note before finalising on an insurance plan

  1. The IDV of your car - In case your car is involved in a theft or accident where it has suffered damages, the amount that you will be compensated with depends on the Insured Declared Value (IDV) of the vehicle. So, the higher the IDV of your car, the bigger the amount you receive as payout for your claim. However, a big IDV also contributes to higher premiums.
  2. Discounts from insurance providers - Browse through the discounts offered by various insurers to get the most befitting policy.
  3. No Claim Bonus - When you purchase a used car, you will be starting with 0% NCB. However, you will be able to accumulate NCB as each year passes without claims from your end.
  4. AAI Membership - If you are a member of the Automobile Association of India (AAI), you will be liable for further discounts on your policy.
  5. Discounts based on age and profession - Some insurance providers offer age-based discounts on the premium corresponding to own-damage. Discounts are also offered based on professions, with Government employees attracting greater benefits.
  6. Installation of Anti-Theft devices - If your vehicle has an anti-theft device installed and the equipment is approved by the Automotive Research Association of India (ARAI), then you will be eligible for attractive discounts on the premium.
  7. Voluntary Deductible Discount - If you opt to pay a part of the claim amount, then you will receive an extra discount during the purchase of the policy.
  8. Claim Settlement Ratio and Post - Sales Service of the insurance provider - Before you make a payment for the insurance policy, you should ideally review the insurer’s market presence and their ratio of claim settlement. It is also advisable to read reviews by other customers on their after-sales service. This information gives you an insight into the reliability of the insurance company and helps you in making a prudent decision.

Impact to No Claim Bonus of used car

Many buyers of used cars are under the impression that when they get the car insurance transferred, they will also benefit from the accumulated No Claim Bonus. But this is not true. NCB is the reward given to the owner of a car for claim-free years; this amount is granted to him, not the car. So, he can retain the NCB and transfer it to the insurance of the vehicle that he would buy in the future. In effect, if a vehicle has an NCB discount on its insurance, it will not be retained in the new insurance policy after the vehicle has been registered to the new driver. This causes an increase in the premium of the new insurance policy, and the new owner of the vehicle will have to bear the differential amount.

If you are the seller of a used car, you should furnish the following documents in case you want to retain your NCB.

  • A letter requesting the cancellation of the insurance policy
  • A copy of the original insurance policy and the insurance certificate, i.e., Form 51
  • Notice of transfer of ownership of the vehicle, i.e., Form 29
  • Application for the intimation and transfer of ownership of the vehicle, i.e., Form 30
  • Copy of the registration certificate booklet bearing the name of the new owner.

The transfer of a used car insurance is made comfortable through online forms at neutral financial websites. They also facilitate the car inspection process to ease your burden in the transfer of insurance. So it is advisable to make use of the online facility as much as possible.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

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Claim Reviews

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    "Good"
    0.5 4.0/5 "Great!"
    I have applied car insurance from Universal Sompo through online, my company has provided me this insurance. One time payment i made Rs.23,000 and still there is a no claim and also i 'm getting a no claim bonus for this car insurance. I have given all my documents and they given document also.
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  • New India
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    0.5 5.0/5 "Blown Away!"
    I have taken a car insurance from New India because when I taken my car, they have provided the policy from this company and I have been renewing with the same one. I pay the premium amount of Rs. 7,000 and they are giving me a IDV value up to Rs. 5L. I used to renew the policy in their branch office and the response was good. They don't sent any notification regarding the policy expiry.
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  • review Car Insurance
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    "Excellent policy"
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    I chosen my car insurance from Reliance because the car where I have purchased those guys deal with the Reliance. If something happened I should not be in a trouble so I agree with them. They are providing a good IDV value for my car. They are sending me a notification through the call and SMS. I used to renew the policy at home because the agent use to come to my place for renewing the policy.
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    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    By online randomly I have chosen the car insurance from HDFC Ergo. Their claim ratio is really good. I pay the premium amount of Rs. 19,000 on a year and they are giving me IDV value of Rs. 1.70L. This is a comprehensive policy which covers for 100%. I have a claim experience which is good but I need to pay the claim fee of Rs. 1000.
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  • Magma HDI Car Insurance
    "CHEAP AND BASTERS MAGMA MOTOR INSURANCE "
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    They are very cheap, kamine type people.They talk with customer very rudely.And they play a trick with customer after accident or during claim.Firstly they not visit.And after one week they visit and hold all work .After two week they will ask that MAGMA want to visit the accident site with customer.Till that time customer become frustrate becs their motive is also to frustrate the customer so that customer deny to take the claim.And one importent thing they will say if customer could not visit accident site with MAGMA then no claim will approved becs their motive is do same. SO NOT TAKE ANY INSURANCE FORM MAGMA.KAMINE LOG HAI GHATIYA KISM KE .
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    , ludhiana
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  • ICICI Lombard Car Insurance
    "Good "
    0.5 3.0/5 "Satisfactory"
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    , bangalore
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  • United India Car Insurance
    "Good Service"
    0.5 5.0/5 "Blown Away!"
    My company has provided me a car insurance from United India. The agent who work with us as a colleague provided me this policy. The premium amount is coming around Rs. 16000. They are giving a coverage amount of Rs. 12 lakh. This is a first party comprehensive plan. I'm getting a no claim bonus and road side assistance as well.
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    "Good Policy"
    0.5 5.0/5 "Blown Away!"
    My car insurance was taken from New India because i am holding the policy with the same company for almost 30 years and i have done the claim twice so far. My claim experience is really good because they have done a cashless claim upto 90%. I have been paying the premium amount of Rs. 8500 per year and they are giving a IDV value of Rs. 3 lakhs.
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    , jamshedpur
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  • Universal Sompo Car Insurance
    "Good Insurance"
    0.5 5.0/5 "Blown Away!"
    Taken my car insurance from Universal Sompo because the premium is less when i compared to other insurance provider, they have provided me a IDV value of Rs. 4 lakh. When i have done the cashless claim, they have sanctioned in 2 days. I'm getting renewal message in prior when the policy is getting lapsed. This is a first party insurance policy.
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    , chennai
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  • Reliance General Car Insurance
    "Good Policy"
    0.5 4.0/5 "Great!"
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    , tirupur
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    "One of the best policy"
    0.5 5.0/5 "Blown Away!"
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    , guwahati
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  • National Insurance Car Insurance
    "Good policy"
    0.5 5.0/5 "Blown Away!"
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  • National Insurance Car Insurance
    "Excellent policy"
    0.5 5.0/5 "Blown Away!"
    TATA AIG car insurance is pretty awesome policy. So I have taken my car insurance from this company because they are providing me a bumper to bumper offer, comprehensive policy even if the car is 7 years old and this is the only company who provides this facility. To apply the claim is very easy in a single call. They have provided me 100% claim.
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    , bangalore
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  • United India Car Insurance
    "Secure and fast claim"
    0.5 5.0/5 "Blown Away!"
    My car insurance was purchased from United India and i have been renewing the policy with the same company for last 5 years. My claim experience is very fast and there is no struggle in getting the claim. The person will come to the spot by the next day once we applied the claim. I got the claim upto 90%. I have been receiving the no claim bonus also.
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    , kochi
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  • Royal Sundaram Car Insurance
    "Money waste policy"
    0.5 1.0/5 "Really Bad"
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    Was this review helpful? 1
    , chennai
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  • Oriental Insurance Car Insurance
    "Need to improve the service"
    0.5 4.0/5 "Great!"
    ORIENTAL INSURANE has provided a car insurance and they have provided me a better offer with the better quotation including the bumper to bumper offer so that i took the same and till now i never spoke with the customer care also. I have not approached for them for any claim. They have offered me a coverage value of Rs. 3.5L. I have renewed the policy in online.
    Was this review helpful? 1
    , chennai
    Reviewed on Jan 21, 2020
  • United India Car Insurance
    "Service is good"
    0.5 4.0/5 "Great!"
    Took my car insurance from United India based on the agent suggestion. I pay the premium amount of Rs. 3600 its because of the no claim bonus and some extra discounts. I have not applied any claim till now. From 7 years, i have been renewing the policy with the same company. They will give reminder call and I'm getting SMS from United India before the policy expiry.
    Was this review helpful? 1
    , jaipur
    Reviewed on Jan 16, 2020
  • New India Car Insurance
    "Good policy"
    0.5 4.0/5 "Great!"
    Chosen my car insurance from New India since its a government sector company and i have a known person over there. There is no cashless claim i had because there is a delay in that and it takes almost 1 week. They are giving claim upto 70% since my vehicle is old one. I pay the premium amount of Rs. 12500 on every year. They said they are providing a road side assistance and no claim bonus facility.
    Was this review helpful? 3
    , coimbatore
    Reviewed on Jan 16, 2020
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