How to insure your second-hand vehicle?


Having a motor insurance policy has become essential in today’s world. This is because there are a lot of safety risks on the roads. The increase in the number of vehicles and consequent traffic has a part to play in this. Insurance policies cover your vehicle, as well as the third-party’s, from unforeseen accidents.

It is important to note that third-party car insurance is mandatory in India for every vehicle, whether new or second-hand. Moreover, besides this mandated insurance policy, there are other policies that offer comprehensive coverage with add-on options to customize your cover as per your specific needs.

While buying a motor insurance policy online for a new vehicle is a hassle-free affair, there is a process for insuring second-hand vehicles in India.

First and foremost, it is important to note that shifting states requires re-registration of the second-hand vehicle with the (new) local RTO within thirty to ninety days of relocation. The following will inform you of the steps needed to transfer ownership and purchase motor insurance for your second-hand vehicle in India.

Second-hand car insurance transfer process in India

  • You need to obtain a No-objection certificate (NOC) from the current RTO informing about your transfer.
  • If there are any bank liabilities on the vehicle, you also need to obtain an NOC from the bank.
  • Then present the following documents to the current RTO to initiate the transfer process:
  • Application of request for the inter-state transfer of the NOC
  • Registration, insurance, tax, pollution under control (PUC) certificates
  • The original chassis imprint of the vehicle
  • Four copies of CMV form-28.
  • Obtaining an NOC from the police may speed up the process.
  • An NOC from the traffic police validating ‘no liability’ is also required.

After adhering to the aforementioned procedure, you can drive your vehicle to the new state without any fear. Once there, you are supposed to re-register the vehicle with the local RTO after providing all the transfer documents.

To reiterate, these are the main documents you will require:

  • Form 29-30 to register the number.
  • A copy of the original RC.
  • A copy of the insurance policy of the vehicle.
  • A copy of the NOC obtained from the previous RTO.
  • A copy of the emission test certificate / PUC.
  • Original chassis imprint of the vehicle.
  • A copy of the new owner’s ID card along with the local address proof.
  • Applicable fee receipts.

Once you are done with the transfer of ownership, you are supposed to raise an endorsement request with the insurance company covering the vehicle to update the name of the policyholder to yours.

Consequences of failing to transfer insurance when buying a second-hand car:

  • In case the vehicle gets involved in an accident, the insurance claim can only be made by the policyholder. This means that the insurance company will not entertain your claim unless the policy is in your name.
  • Again, you would not be able to avail medical expenses from the insurance policy covering the vehicle because you are not the valid policyholder.

They say ‘tomorrow is a mystery’. It is, therefore, prudent to conduct the due formalities after purchasing a second-hand vehicle. Moreover, this process can’t get costlier than being involved in an accident in the future and having to pay from your pocket. Avoid procrastination and buy a second-hand car insurance policy actively to protect yourself from financial losses.