Updated on 24 Dec 2025
After selling a car, it’s natural to think about what will happen to your insurance. Whether you have a comprehensive insurance policy or a third-party car insurance plan, it is essential to handle the transition carefully.
As insurance is a legal requirement, missing any step can cause financial or legal problems. Selling your vehicle has direct consequences for your existing insurance policy. So, it’s important to understand the responsibilities of the seller, the buyer’s choices and how you can secure no-claim benefits. All this ensures a smooth handover of the vehicle and its protection.
When I Sell My Car, What Happens To My Car Insurance?
When you sell your car, you have to transfer your four-wheeler insurance to the buyer of the car. Here is a breakdown of the process:
- Seller's responsibilities: The seller must transfer the car insurance after selling the car to the buyer at the time of sale. It's important to claim the ‘No Claim Bonus’ (NCB) certificate during this process. It cannot be transferred to the buyer.
- Buyer's obligations: Buyers need to apply for the transfer of the car insurance ownership within 14 days of the car's purchase. Failure to do so might lead to claim rejection.
- Insurance transfer procedure: The seller must inform the insurance company in writing about the intention to transfer the policy. A nominal fee for the transfer applies, along with the recovery of the NCB from the transfer date until the policy's expiry date.
- Buying new insurance: If the buyer prefers a new policy rather than continuing the transferred one, it's advisable to compare quotes for car insurance online to find the best plan that meets your requirements.
What are the responsibilities of the person selling the car?
The seller has some key responsibilities during the transfer process:
- Keep insurance active: Maintain insurance until the registration transfer is complete.
- Provide documents: Hand over the signed registration certificate, sale receipt and a copy of the insurance to the buyer.
- Inform authorities: Notify your insurer and the local transportation authority about the sale so that liability is no longer tied to you.
- Follow the process: After completing these steps, you can avoid problems if the buyer delays ownership or is involved in an accident. At the same time, it’ll keep your insurance record clear.
Options if your buyer doesn’t want the transferred car insurance
In such a case, you can consider these options:
- Cancel your policy after completing the paperwork.
- Use the no-claim bonus if you have any.
- You can switch to short-term or third-party car insurance until you buy a new car.
Conclusion
Selling a car needs more than paperwork. You need to manage your car insurance policy correctly to ensure legal and financial safety. Keep the car insured until the transfer is complete. Then, either cancel or transfer policy benefits to the buyer. Doing this in a timely and transparent way can help avoid extra charges or complications in future coverage.
While you focus on finding the right buyer for your car, let us help you handle the insurance part with ease. Get personalised advice on the car insurance transfer process by filling out the form provided on this page.
FAQs
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Do I have to keep insurance during the sale?
Yes, as long as the car is in your name, you remain responsible.
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Can I transfer my existing insurance to the new owner?
Yes, but you should ensure proper documentation and the insurer's agreement before doing so.
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What happens to my no-claim bonus?
You can keep it or use it for up to a few years, provided you inform the insurer when you sell.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.