Transferring Insurance of Second-hand Vehicle
How to Transfer Motor Insurance of Second-hand Vehicles
Whether you buy or sell a second-hand vehicle, make sure to transfer the insurance as well
Make sure to transfer insurance while buying or selling a used vehicle
Buying a vehicle, even if it is second-hand, is a major decision. It’s likely that you might even ignore the essential documentation in the excitement of buying the vehicle. However, transfer of documents such as the transfer of insurance is a crucial aspect of buying a second-hand vehicle and it’s the responsibility of both the parties involved to avoid any legal hassles in the future.
Buying a New Vehicle Vs Buying a Second-hand Vehicle
When you buy a new vehicle, the dealer completes the procedures and required documentation. You do not have to bother about anything. You get the keys in your hand and you are free to drive the vehicle. However, that’s not the case with the purchase of second-hand vehicles.
Although, the seller has a responsibility to help you complete all the documentation, but, as a buyer, it is your duty to complete it by yourself. The process of transferring the insurance in your name is more important than transferring the ownership and the vehicle should be insured under your name now.
Why Vehicle Insurance is Necessary?
Firstly, third-party motor insurance is mandatory by law for every vehicle owner. Secondly, it indemnifies you, even if partly, against injury caused to you and/or damage caused to your vehicle in the event of an accident. The damage to your vehicle can be bearable as the loss is limited to the cost of the vehicle. Besides, you may have health insurance to cover your hospitalisation expenses in case of an accident.
However, you will not have anything to fall back on if your vehicle causes an injury to a third person or damage to a third person’s property. A third-party claim could be very high and can bring you financial distress, if you do not have a legally valid third party insurance cover for your vehicle.
How to Transfer Insurance
The first thing you should do after getting all the documentation done for the transfer of a second-hand vehicle in your name, is to have the requisite documents, get the forms filled and signed by the previous owner of the vehicle and submit it to the insurance company. Most insurers provide a 14-day period to do so. However, it is in your interest to do it at the earliest.
Do both the documentation for transfer of vehicle and transfer of insurance simultaneously. The process of transfer of the registration certificate and the insurance can happen simultaneously. You do not have to wait for the receipt of transfer of vehicle in your name in the registration certificate. The transferred vehicle registration certificate can be submitted to the insurance company when you receive it.
What Happens If the Vehicle Meets an Accident Before Insurance Transfer?
If, unfortunately, your second-hand vehicle meets with an accident before the insurance is transferred in your name, the insurance company can reject you claim. When the transfer of a vehicle is in process, the insurance company is liable to pay third party compensation only for the first 14 days from the date of sale. After the end of the 14-day period, it is the liability of the second owner. Under law, the purchaser of the second-hand owner is responsible for having the insurance transferred in his name.
The insurance company will not indemnify damage to the vehicle or yourself within the first 14 days from the date of purchase, if the insurance isn’t transferred in the name of the new owner. The previous owner can also face hassles if the insurance is not transferred even after the 14-day period and a third-party claim is made. However, he can get away with any liability after he proves the sale of the vehicle.
Therefore, it is in the interest of both the purchaser and the seller, of a second-hand vehicle to ensure that not only the process for transfer of the vehicle is completed but also the transfer of motor insurance in the name of the new owner is completed.
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