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Owners of used cars have frequently experienced severe financial hardship as a result of failing to meet the eligibility requirements for car insurance claims. The new owners failed to transfer the insurance policy into their name following the acquisition, which is the cause. The absence of the new car owner’s name from the automobile insurance policy suggests that there is no legal agreement between him and the insurance provider. As a result, the new owner is not responsible for any losses or damages brought about by an accident.
Ignorance Isn’t Bliss in Car Insurance
There are numerous instances where owners are denied auto insurance claims after the loss or damage has occurred. Most often, this occurs as a result of ignorance. Therefore, it is crucial for people who have bought or plan to acquire a used car to transfer insurance coverage in their names from prior owners. This must not be treated lightly or disregarded. Additionally, to avoid potential legal issues in the future, a former owner must ensure that the vehicle’s insurance is transferred into the name of the new owner.
What’s Next After Purchase?
Section 157 of the Motor Vehicle Act requires the new owner to apply directly to the insurance company within the first 14 days of purchasing a used car to have the insurance policy transferred into his name. It should be noted that during the first 14 days, only the “Third Party” portion of the motor insurance policy is automatically transferred. The insurance policy must be registered in the name of the new owner to transfer the “Own Damage” section. The insurance company is not liable for any losses sustained by the current owner after the first 14 days have passed if the new owner does not have the insurance policy transferred into his or her name. This applies to both third-party and own-damage losses.
Problematic for the Previous Owner
If the new owner causes an accident and injures a third party, the first or prior owner may be served with a court summons and ordered to pay damages. Things can get very challenging. So, to prevent legal complications, both the seller and the buyer should transfer the used car.
The Process of Policy Transfer
As soon as possible after buying a used car, make sure the former owner’s auto insurance policy is changed to the new owner’s name within the first 14 days.
- To transfer the policy, a new proposal form must be completed together with the proof of sale, such as the transfer of RC, Forms 29 and 30, all of which must be officially signed by the former owner, the transfer fee, and a copy of the existing policy. These should be given to the insurance provider, who will subsequently approve the transfer’s endorsement.
- When filing a claim, it will be easier to deal with any problems if you submit a copy of the new RC once the RTO issues it.
- When filing a claim, you must show the insurance company documentation of the transfer of the RC if the ownership change is not reflected in the RC copy even after the insurance policy has been transferred or if the proof of the transfer has not been provided.
- The claim won’t be rejected if the transfer process is still in progress, but it won’t be reimbursed until the insurance provider has received the proof of transfer in RC.
Tackling RC Transfer Delays
To file a claim on your used-car insurance coverage during the transfer procedure, follow these steps:
- Give your insurer a copy of the proof of transfer, This assists in registering potential claims and, if the RC doesn’t represent a change in ownership, usually prevents any insurance rejection.
- Do not forget to provide a copy of the RC book. Your insurance won’t reject your claim if you damage your secondhand car before the RC is transferred. But I won’t pay it until you send me confirmation of the RC transfer.
Who Can Initiate the Transfer Process
You can handle the transfer yourself with the prior owner, through a representative or broker, or through the dealership where you purchased the used vehicles.
You can save money by avoiding brokerage fees and choosing your own insurance company when you purchase used auto insurance directly. You might not need to select an insurer if you choose a broker or used car shop. The benefit is that you become qualified for offers on car-care packages like complimentary servicing and extended warranties on repairs and parts.
Online, selecting a used automobile insurance company and a coverage option that fits your budget is simple. This kind of insurance is required to have a simple claim procedure if your car is damaged in an accident.