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Selling your car? Don’t forget about your insurance—it doesn’t automatically go with the vehicle. In India, car insurance needs to be transferred separately to keep everything valid and legal. This auto insurance transfer helps avoid issues with claims and protects your No Claim Bonus for future use. Thankfully, the process is simple when you know what to do. Knowing how to transfer the insurance of a car to the new owner can save you time, money, and stress—so don’t skip this important step.
Knowing which type of car insurance to choose can save you from unexpected costs and legal issues. Here, you’ll find simple explanations of each major insurance type available in India:
This is the simplest type of car insurance and is mandatory under Indian law. It covers injury, property damage, or vehicle damage caused to a third party. However, it does not include protection for any damage to your own car.
This cover pays for repairs to your car after an accident. The premium depends on your car’s age and its Insured Declared Value (IDV). If your car is on loan or has high value, this cover is a smart choice to avoid major repair costs. It’s also essential if you're planning an auto insurance transfer.
This type protects you as the owner-driver by covering medical costs after an accident. It's usually included in your policy, but you can increase the cover for better safety. This is especially helpful for families who rely on a single vehicle owner.
Offered as an add-on, this cover ensures full claim payouts without cutting depreciation from the parts' value. If your car is new or has expensive parts, this add-on can give you peace of mind. It’s a great benefit when buyers evaluate how to transfer car insurance to the new owner.
This policy offers full protection, including third-party liability, own damage, natural disasters, theft, and personal accident cover. You can also add extra features like roadside help or engine protection. A well-maintained comprehensive policy can increase your car’s resale value and make insurance transfer smoother.
When you sell your car, your insurance policy doesn’t end with the sale. It stays active in your name until it’s officially transferred or cancelled. Here’s what you need to know to avoid confusion or legal issues:
The insurance policy must be transferred to the buyer—only then can they make a claim if needed
If the buyer drives without transferring the policy, any claim they file may be rejected
Selling the car mid-policy? The buyer can enjoy the remaining coverage, but only after completing the transfer
You should inform the insurance company about the sale and submit a request for an NCB retention letter
If you’re unsure how to transfer your auto insurance, most insurers offer help online or at their nearest branch
An incomplete transfer could leave you responsible for claims or fines, even after the car is sold
Make sure your motor insurance transfer is completed on time to avoid future stress for both you and the buyer.
When you sell your car, you must transfer both the Registration Certificate (RC) and the insurance policy to the buyer. The RC transfer is done at your local RTO by submitting Forms 29 and 30, along with ID proof, valid insurance, the original RC, and a pollution certificate. Once approved, a new RC is issued in the buyer’s name.
The insurance must also be transferred to ensure continuous coverage. Without it, the buyer can’t file claims, and you may stay liable. Most insurers ask for the updated RC, a transfer request, and basic documents. Some may inspect the vehicle. Completing both steps ensures legal safety and a smooth motor insurance transfer for the new owner.
Transferring car insurance is just as important as transferring ownership. It protects both you and the buyer from future problems. If the policy stays in your name, you could still be held responsible for accidents or legal issues involving the car—even after it’s sold.
For the buyer, a valid policy ensures coverage from day one. Without it, they may not be able to claim for damages or third-party losses. Most insurers won’t accept claims if the policyholder’s name doesn’t match the new RC.
A smooth insurance transfer avoids confusion, delays, and legal risk. It also makes sure the buyer gets the benefits they’ve paid for, including add-ons and coverage until the policy ends.
Your car insurance can directly affect how much you get when you sell your car. A valid and well-maintained policy, especially a comprehensive one, shows buyers that the vehicle has likely been looked after. This gives them more confidence in the car’s condition and reduces their perceived risk.
If your insurance record shows no past claims, it reflects responsible ownership. This can make your car stand out in the used car market. Buyers may also prefer cars with ongoing cover, as it makes the auto insurance transfer process easier. Keeping your policy active and claim-free can help you get a better resale price.
Here are the main factors that directly impact your car’s resale value and can make a big difference in the final selling price:
Age of the vehicle: Older cars usually have a lower resale value due to wear, ageing parts, and reduced demand
Mileage covered: Lower mileage means less usage, which often suggests better condition and longer remaining life for the vehicle
Service history: A complete and regular service record builds buyer trust and shows the car has been well maintained
Accident record: Cars with no history of accidents are more appealing and can fetch a higher resale price
Here are simple yet effective ways to increase how much you can earn when selling your used car:
Follow regular service schedules: Timely maintenance shows the car is well cared for and helps avoid issues during inspection
Keep all service records: A complete file of bills and receipts builds trust and shows the car has been maintained properly
Clean the car inside and out: A clean car looks newer and more appealing to buyers, creating a strong first impression
Fix small problems early: Repair minor dents, scratches, or faults before listing the car to avoid price negotiations
Avoid major modifications: Keep your car as close to its original condition as possible to appeal to more buyers
Transferring vehicle ownership requires specific documents based on the reason for the transfer. Missing any of these can delay the process or lead to rejection. Here is a clear list of documents needed for each type of ownership transfer:
Document |
Normal Sale |
On Demise of Owner |
Public Auction Purchase |
|---|---|---|---|
Certificate of Registration (RC) |
Required |
Required |
Required |
Certificate of Insurance |
Required |
Required |
Required |
Form 29 |
Required |
- |
- |
Form 30 |
Required |
- |
- |
Form 31 |
- |
Required |
- |
Form 32 |
- |
- |
Required |
Certificate or Order of Auction Sale |
- |
- |
Required |
Government Order Authorising Auction |
- |
- |
Required |
Death Certificate |
- |
Required |
- |
PAN Card or Form 60 |
Seller and Purchaser |
Successor |
Seller and Purchaser |
Proof of Address |
Required |
Required |
Required |
Proof of Date of Birth |
Purchaser |
Successor |
Purchaser |
Chassis & Engine Pencil Print |
Required |
Required |
Required |
Pollution Under Control Certificate |
Required |
Required |
Required |
R.C. Book (Physical Copy) |
Required |
Required |
Required |
Purchaser’s Undertaking |
Required |
- |
Required |
Passport Size Photograph |
Required |
Required |
Required |
Tax Clearance Certificate |
Required |
- |
- |
Form I |
Required |
- |
- |
Form II |
Required |
- |
- |
Signature Identification of Seller |
- |
Required |
- |
Declaration by Legal Heirs |
- |
Required |
- |
Proof of Succession |
- |
Required |
- |
Vehicle Verification (Form 20) |
- |
Required |
- |
NOC from Registering Authority |
Required |
- |
- |
Order Refusing NOC (if any) |
Required |
- |
- |
Declaration of No Response + Receipt/Acknowledgement |
Required |
- |
- |
Note: Document requirements may vary slightly by state or RTO. Always check with your local transport office or insurer for the most up-to-date list.
Here is a simple step-by-step process to help you transfer car insurance from one person to another in India:
Inform your insurance company about the change in car ownership and request a policy transfer
Fill out the insurance transfer application form and sign it before submission
Submit supporting documents such as the new RC copy, NOC, and transfer-related forms
Pay the insurance transfer fee as specified by your insurer
Allow the insurer to inspect the vehicle if it is required for approval
Wait for the insurer to verify the documents and complete the transfer process
Receive the updated policy with the new owner's name and details included
The No Claim Bonus (NCB) is a discount on your car insurance premium for every claim-free year, starting at 20% and going up to 50%. It’s linked to you, not your car, so it doesn’t transfer to the new owner when you sell your vehicle. Instead, you can retain it by requesting an NCB retention letter from your insurer.
This allows you to apply the discount to your next policy, even with a new car or insurance company. Keeping your NCB helps reduce future premiums and rewards you for safe driving over time, making it a valuable benefit.
Here are the key risks you may face if car insurance is not properly transferred after selling or buying a vehicle:
The new owner may not be able to file claims, even if the insurance policy appears active
The seller could remain legally responsible for accidents caused by the car
Driving without updated insurance can lead to heavy fines and legal action
Insurance companies may cancel or void the policy due to mismatched ownership details
Any No Claim Bonus (NCB) earned could be lost if not retained before the sale
In case of theft or damage, unresolved ownership may delay claim processing or recovery
Buyers may lose trust or back out if paperwork is incomplete or unclear
Retaining your No Claim Bonus (NCB) is one of the easiest ways to lower your future car insurance costs. If you’ve driven responsibly and avoided claims, the NCB offers a discount of up to 50% on your next premium. This reward stays with you—not your vehicle—so you can use it even after selling your car.
To retain this benefit, you must request an NCB retention letter from your insurer during the sale process. This simple step ensures you don’t lose the discount you’ve earned over the years. Over time, it can lead to substantial savings and encourage safer driving habits.
Here is what you need to submit to retain your No Claim Bonus and apply it to a new car insurance policy:
Write a request letter to your insurer asking for the NCB retention letter after selling your car
Submit a signed copy of Form 29 and Form 30 as proof of sale and ownership transfer
Provide a copy of the vehicle’s RC updated with the new owner's name issued by the RTO
Attach a copy of the sale agreement or delivery receipt confirming the handover of the vehicle
Include a copy of your previous year’s insurance policy or renewal document issued by your former insurer
Add a declaration letter from your previous insurer confirming your NCB and related policy details
If switching to a new insurer, include a formal transfer application to retain your NCB on the new policy
If you’ve booked a new car, attach the booking receipt as proof of purchase
You may also need to submit an ownership transfer certificate, if issued separately by the RTO
Selling a car isn’t complete without transferring the insurance. It protects both you and the buyer from legal issues, claim rejections, and financial loss. From ownership updates to NCB retention, every step matters. Understanding how to transfer car insurance to the new owner helps you avoid common mistakes and keeps things hassle-free. Don’t treat insurance as a formality—it’s a key part of the sale that can save you time, money, and trouble down the road.
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