Does your second-hand car need insurance?
There have been many instances where owners have suffered a lot financially after failing the eligibility criteria of car insurance claims for their second-hand cars. The reason: the new owners did not transfer the insurance policy in their name after the purchase. If the new vehicle owner's name is missing on the motor insurance policy, then it implies that there is no valid contract between him and the insurance company. So, the new owner is not liable to claim any damage or loss due to an accident or a mishap caused.
Ignorance isn’t Bliss in Car Insurance
There are many Instances of owners not qualifying for car insurance claims post the damage or loss. This happens due to lack of awareness in most of the cases. So, it is critical that individuals who have purchased or are going to buy a second-hand vehicle, to transfer insurance policies in their name from previous owners. This should not be taken casually or ignored. Also, it is incumbent upon a previous owner to make sure that the motor insurance is transferred in the new owner’s name, to steer clear of legal problems that may arise in the future.
What’s Next After Purchase?
After purchasing a used car, Section 157 of the Motor Vehicle Act mandates the new owner to get the insurance policy transferred in his name by directly applying to the insurance company within the first 14 days. It is to be noted that only the "Third Party" section of the car insurance policy gets automatically transferred in the first 14 days. For the transfer of the "Own Damage" section, the insurance policy has to be registered under the new owner's name. After the expiry of 14 days, if the new owner does not get the insurance policy transferred in his/her name, then the insurance company is not responsible for any losses incurred by the present owner, be it the third-party or own damage.
Problematic for the Previous Owner
The first or previous owner can also get a court notice to compensate for the loss caused to a third party, for an accident caused by the new owner. Things can get really complicated. So, it is in the best interest of both the seller and the buyer to get the second-hand vehicle transferred to avoid legal hassles.
The Process of Policy Transfer
Immediately upon purchasing a second-hand car, make sure that the car insurance policy of the previous owner is transferred in the name of the new owner within the first 14 days.
1. To transfer the policy, a fresh proposal form has to be filled along with the evidence of sale i.e. transfer of RC, Forms 29 and 30 duly signed by the previous owner coupled with transfer fee and previous policy copy. These should be submitted to the insurance company, which shall then pass the endorsement of the transfer.
2. Submitting a copy of the new RC after it is issued by the RTO will be helpful in resolving any issues at the time of the claim.
3. If the ownership change is not reflected in the RC copy even after the insurance policy has been transferred /or the proof of same is not submitted to the insurance company, then in case of a claim, you are required to provide the proof of transfer of RC to the insurance company to get the claim.
4. If the transfer process is still ongoing, the claim will not be repudiated, however, it will be paid only after the proof of transfer in RC has been submitted to the insurance company.
Well, people think a lot before buying a second-hand car, however, when it comes to transferring the motor insurance policies to their name, not many do it proactively. This can be financially crippling apart from inviting legal troubles in the event of an accident. So, a policyholder must be careful about the policy transfer within the specified time frame. To find the best policy, thorough research has to be performed online by going through car insurance plans and selecting the one that provides the best coverage for the premium paid.
**To understand exactly about the policy coverage, exclusions etc read the Policy Wordings carefully.**