When buying a second-hand vehicle, some of us tend to forget about the most critical part and that is the transfer of insurance to our name! We spend more time assessing the positives and negatives of the vehicle but completely forget the insurance part. Most of the insurance companies recount experiences of second-hand car owners making a claim when the documents are not even in their name. The claim will never be accepted without a valid contract between the insurance company and the new owner. So, you will be left to tend to yourself without insurance support to back you up.
Recently, the Pune Consumer Court made things clear by passing judgment in favor of the insurance provider since the second-hand car owner had not transferred the insurance to their name. As per the jurisdiction, the insurance policy is always a contract between the owner of the vehicle and the insurance company. Hence, if you bought a second-hand car, the process of transferring the ownership is only complete if you transfer the insurance policy also to your name.
Second-Hand Vehicles Are More Prone To Damages!
Unlike a new vehicle, a second-hand vehicle will be more prone to damages as it has already been used for a certain time period. Even if it is fairly new, still accidents can happen anytime, anywhere! Life is full of unexpected events and accidents, natural disasters, theft, injuries and damage to vehicles are a part and parcel of life. Hence, getting adequate coverage is a necessity be it a second-hand vehicle or a new vehicle!
First Owner Is Also Responsible To Make The Transfer!
In India, there is said to be very less awareness about the necessity to transfer insurance to the name of the new vehicle owner. People may buy second-hand vehicles from their friends or relatives and never bother about insurance. The reality hits hard only when they encounter an accident and is seriously injured. The occurrence of such grievances is very common in India. The second-hand vehicle owner is not only the one who should be responsible for getting the insurance transferred. The first owner of the vehicle should also ensure that they transfer the insurance while they give away the car keys. Another aspect is that, if the second-hand car owner causes some serious accidents, then the previous car owner will also have to take responsibility of the same if all the papers are not properly transferred to the new owner’s name. As long as the ownership of the car remains in your name, you are legally responsible for the damages it makes.
Understanding The Motor Insurance Policy Structure
A comprehensive motor insurance policy is divided into two different parts. The first part is Own Damage(OD) and the second part is Third Party(TP). The OD section will offer coverage to damages made to own vehicle due to accidents, natural disasters or theft. The TP section offers coverage to third-party claims when your vehicle causes injuries to a third party or causes damages to the properties of a third party.
When you buy a second-hand vehicle, as per the Motor Vehicle Act, Section 157, you have to get the insurance transferred to your name within the first fourteen days of the purchase. For the first fourteen days, the TP section will get automatically transferred to your name while the OD section will remain in the name of the first owner itself. OD section will only be transferred if you transfer the insurance to your name. After the first fourteen days, if you fail to get the insurance transferred to your name, then the insurance company will not be responsible for any damages that occur to your vehicle or a third-party vehicle. The insurance will also not provide coverage for any injuries caused to you or any third-party. In short, you will not get any OD or TP benefits after the fourteen days period.
Five Points To Ensure Seamless Insurance Transaction
- Ensure that you transfer the insurance policy to your name within fourteen days of purchase of the second-hand vehicle
- For the submission procedure, you will need a new proposal form. Fill it up and submit it along with the evidence of sale. The evidence of sale includes RC transfer document, Form 29 and 30 signed by the first owner along with copies of the previous insurance policy and transfer fee. The insurance company will pass the transfer endorsement when they receive all these documents.
- Changing ownership in the RC by the RTO office can take some time. But submission of all the above documents is enough for the endorsement proceedings to start. After you get a new RC from the RTO office, ensure that you submit a copy of the same to the insurance company.
- If the insurance policy transfer was successfully done, but the RC transfer is not yet received and you encounter an incident where you have to make a claim; then you will have to submit proof of the RC transfer request given at the RTO office to the insurance company.
- If you fail to submit the proof of RC request transfer, then the claim will not be accepted until you submit the proof. Once you submit it, the claim process will start.
While you might spend so much time thinking and rethinking about the decision to buy a second-hand car, many of us fail to consider the insurance policy transfer which is also an equally important factor to be considered. Never make the mistake! Think ahead and make wise decisions!
