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Kolkata: The market for second-hand or pre-owned cars is growing fast in India. Sometimes it makes more sense to buy a pre-owned vehicle. But driving a vehicle in India without a valid insurance policy is both illegal and financially risky. Section 146 of the Motor Vehicles Act, 1988 enjoins that you have to have an appropriate motor insurance policy. In case you are planning to buy a second-hand car, the onus of getting the car insurance policy transferred in your name in only yours. Therefore, you simply cannot ignore it.
Most people go for third-party car insurance policies in India. A third-party vehicle insurance policy covers the following -- damage to vehicle, damage to property, accidental death and injuries. Also one can go for comprehensive policies which will shield third-party liabilities apart from damages from unforeseen situations such as fire, theft etc.
If you don't get a car insurance policy transferred from the previous owner to your name, if you meet with an accident involving third-party liability, you cannot file a third-party claim with the insurer to get any compensation. You cannot get any compensation since the policy is still in the name of the earlier owner of the vehicle. It will also be illegal, apart from the financial risk. If you are detected driving a vehicle without a valid insurance policy in your name, you can face a penalty of Rs 2,000 while the amount will double for the next instances and in repeated detections, you can even be jailed.
The request for the transfer of the insurance policy should be made within 14 days from the date of purchase. It is better to know about what documents you will need to get the insurance policy transferred. These are:
Insurance policy documents of the old car
Registration certificate or receipt of RTO
Copy of Form 29: Car ownership transfer notice
Form 30 (It is an application for reporting and transferring the ownership of a motor vehicle)
NoC from earlier owner of the vehicle
Filled up application form for transfer of car
Inspection report of the insurer
A few insurance companies also ask for pollution under control certificate
However, usually no claim bonuses don't get transferred since it is given to the owner and not to the vehicle.
It might so happen that the vehicle is involved in an accident even before the insurance transfer takes place. In such a situation, the insurance company is likely to decline any request for compensation. But if the registration certificate transfer is under process, the insurance company would accept third-party compensation claims for 14 days from the date of sale of the vehicle. If the 14-day window is over, and the insurance is yet to be transferred to the new owner's name, no claim will be entertained.
