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Insurance Article

Selling Your Car? Here's How to Transfer Your Insurance Policy

August 03 2018
Insurance

Don’t let the documentation process intimidate you

Are you excited to sell your car and upgrade to a better model? That’s wonderful, however, selling a car comes with an additional set of responsibilities! While you may be focusing a lot on buying your new car, there are a few things you have to consider in regards to selling your old one.

You need to ensure that you transfer your insurance policy and other documents in the right manner to avoid any issues that may arise in the future. Here’s what you need to know for a smooth handover.

  • Importance of the Documentation Process
    You will continue to be held responsible for any liability related to the car, even after you sell it, if you don’t follow the proper documentation process. To free yourself of future liabilities associated with your car, you need to pay attention to two aspects of the process, transactional and RTO.

  • Transactional Documents
    Once you’ve finalized the deal with the prospective buyer, you should get a sale affidavit and delivery note signed by them. Make sure to attach the prospective buyer’s identity proof and address proof like PAN Card and Aadhaar Card. Don’t forget to attach the cheques that you are receiving as the payment to the sale affidavit. It’s essential to get the sale affidavit notarised and signed as it acts as an agreement transferring all vehicle related liabilities to the buyer.

  • RTO Documents
    Here are the important car insurance transfer forms required by the RTO.

    • Form no. 28
      This is an application for receiving an NOC from the registering authority. This is essential as it acts as proof that you have no unresolved liabilities or obligations related to the vehicle.

    • Form No. 29
      This form acts as a notice to the RTO that the vehicle is being sold by the owner and that all required documents have been handed over to the buyer.

    • Form No. 30
      This form acts as a confirmation to form no. 29.

    • Clearance Certificate
      The clearance certificate is a simple application made to the RTO, informing them that your vehicle has been sold. It includes the details of the buyer, seller and the vehicle.

  • Motor Insurance Policy Transfer
    The buyer doesn’t have to take a fresh policy for the car, you can simply transfer your existing policy to them when you’re selling a car to them. Vehicle insurance transfer will also rid you of any legal issues that may crop up later. You must fill a fresh proposal form and submit it to the insurance company. Attach all the documents listed above as well as the previous policy. On receiving these documents, the insurance company will pass the endorsement of transfer. The entire activity must be completed within a period of 14 days. Now you know the steps you need to go through for a hassle-free handover of your car and its policy cover. As important as it is to transfer your old car’s policy, it’s also crucial to get an insurance cover for your brand new ride.

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