The impact on your car insurance policy while selling your car

Car owners often upgrade their vehicles after a specific number of years or kilometres on the odometer. If you're planning to upgrade your car, you might be wondering what happens to your insurance when you sell it. Here’s everything you need to know.

Is insurance important?

Securing a car insurance policy is essential for both current owners and new buyers. Unlike many other types of insurance, it is not optional but legally required. Failing to have car insurance can lead to significant penalties and leave you financially exposed.

One would want to sell their car either for an upgrade if they are moving out of the country or they do not need a car right now. If you sell your car what happens to insurance? This is a question that a lot of car owners have. When you sell your car, apart from finding a buyer, there are a few documents needed such as:

1. Ownership transfer

2. Insurance transfer

Ownership transfer

You will need the following documents and these must be transferred to the new owner of the car, for the transaction to be complete.

1. Registration certificate

2. PUC

3. Form 29 and 30

4. Existing car insurance policy

5. No objection certificate

Insurance transfer

A lot of car owners wonder if I sell my car what happens to the insurance. Here are some of the impacts of insurance on selling a car.

1. You must first inform your insurance provider about the car sale. If you have not filed any claims and are eligible for a no-claim bonus, you will receive a no-claim bonus certificate. The validity of the certificate is up to 3 years, and you can utilise it with your new Zurich Kotak Car Insurance.

2. If you are selling the car during the middle of the policy tenure, you can transfer the policy to the buyer. This will allow them to continue with the benefits of the policy, till they can renew. But the policy must be transferred, or else they will not be able to file any claims. The following documents are needed to complete the transfer.

   • Application form

   • No objection certificate from the previous insurer

   • Form 29

   • Previous car insurance policy

   • Inspection report by existing insurance provider

Why it is important to transfer insurance?

There are a couple of strong reasons to exercise the transfer of insurance.

1. In the unfortunate event of an accident, the buyer will not be able to file a claim if the insurance is still in your name.

2. You will be liable for any legal consequences if the vehicle is involved in any such incidents.

On selling your car, it is important to transfer the insurance as well. For your new car, you can buy car insurance online and save on the premiums as well.

Conclusion

Car owners who were wondering if I sell car what happens to insurance, now know the answer. Unless the policy is up for renewal, it is a good idea to transfer the policy.

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