What is the process of transfer of insurance policy during the selling of bike?

Once you are done with the transfer of ownership, you are required to transfer the insurance policy. In fact, it is the duty of the buyer of the bike to get the insurance policy transferred in his name within 14 days of buying the bike. If not, any claim made would not be paid. You should also help the buyer with the transfer process as you would be legally held liable for any claim faced by the buyer till the policy is transferred.

Transferring insurance is quite a simple process actually. To do so all you have to do is follow the below-mentioned steps –

• Inform the insurance company about the sale of your bike
• Some documents need to be submitted to the insurer to transfer the insurance cover in the name of the buyer. These documents would be the following –
  • The new RC book of the bike containing the name of the buyer. If the new RC book is not yet available, the proof of transfer of ownership can be submitted for the time being. Later, when the RC book is available, it should be submitted to the company
  • Original policy bond
  • Address proof of the buyer
  • Passport sized photographs of the buyer
• Once the documents and request for transfer is submitted, the insurance company would begin the transfer process
• The bike might be inspected in some cases
• A fee would also be required to be paid for transferring the policy
• You should avail the no claim bonus certificate from the insurance company so that the accumulated bonus of the policy can be retained in your name
• If the documents are in order and the transfer fee is paid, the insurance policy would be transferred in the name of the buyer

The whole process of insurance transfer should also be done within 14 days of selling the bike. The third-party cover would automatically operate in the name of the buyer from the date of sale for up to 14 days. It is assumed that during this process the transfer process would be completed. However, once 14 days are over and the policy has not been transferred, the third-party cover would also cease.

As stated earlier, though transferring the policy is the burden of the buyer, you, as a seller should be involved in the process. Here are the reasons why –

• Retention of No Claim Bonus – any bonus you earn because of not making any claim in the previous policy years entitles you to a discount. It was your safe driving which caused no accidents and, thus, incurred no claims. Therefore, you are entitled to enjoy the benefits of the No Claim Bonus earned on your policy, especially when it allows premium discounts. If you do not transfer the policy, you cannot avail the No Claim Bonus Certificate and you lose the discounts earned by you. Would you want that?
• Freedom from future liabilities – suppose the new buyer of your bike causes damage to any person or property while driving the bike. If a third party claim is raised on your policy and you are named as the policyholder, you would be legally liable. Though your insurance policy would pay off the financial claims, you would have to ensure such claim settlement. Transferring the policy, therefore, frees you from future liabilities.

Transferring the ownership and insurance policy of your bike is essential when you are selling it off to another person. It is legally required and is also beneficial