(MENAFN- Outreach Trends)
If you plan to buy a new car, the insurance will be transferred from one car to another.
You can get online auto insurance too! To know if insurance can be transferred from one car to another, continue reading.
What is Car Insurance Transfer, and how does it work?
Essentially, it is the act of transferring ownership of an automobile insurance policy from its current holder to another person who has the vehicle's ownership rights. When purchasing or selling a used automobile, it is important to be upfront about your intentions.
As a result of the withdrawal of one party from an insurance policy contract and the subsequent admission of a new party, the contract is officially terminated. Both parties need to transfer an automobile insurance coverage within 14 days after the date of purchase, as stipulated in Section 157 of the Motor Vehicles Act.
What exactly does place throughout those 14 days?
For third-party liability insurance, coverage is immediately transferred upon purchase and continues in effect for the next 14 days after that date of purchase. When comprehensive insurance is purchased, just the third-party component of the policy is transferred to the new owner.
When is it necessary to transfer your car insurance policy?
Still not persuaded about the significance of vehicle insurance policy transference? Check out this infographic. This section will look at a few circumstances in which transferring insurance policies might be beneficial.
Suppose you have finally managed to save up enough money to purchase a used automobile in the first scenario. You go online and look at a few different second-hand automobile models before settling on one of them. If you want to know how many kilometers the automobile has traveled in its lifespan and how long it has been in operation, you should inquire with the vendor.
You discover the answers to your questions and decide to buy the product. You bargain for a lower price and make your payment by the agreement. Following that, you apply for the transference of the registration certificate in your name. Still, you defer the application for the transference of the auto insurance policy until the RC transference has been completed. It takes a month before applying for a vehicle insurance policy transfer.
Now, after a few weeks, the engine in your automobile begins to malfunction. You take it to one of the insurer's network garages for repairs, and you submit a claim for cashless repair with the insurer. However, it refuses to settle your claim since you are not the party with whom they entered into a contract in the first place. You submit a complaint against them, but it is dismissed because you are not the policyholder and, as a result, do not have the authority to make a claim.
It's because, according to the Motor Vehicles Act 1988, you were required to apply for the appropriate modifications in policyholder status within 14 days of purchasing the vehicle.
You've decided to sell your automobile, which you've had for three years and haven't driven. It is covered by a current insurance policy that is good for another two years. You locate a buyer willing to purchase it at a fair price. The registration certificate for the vehicle is transferred as a result. However, you did not transfer the current insurance policy since you were under the impression that it would be automatically transferred. The buyer takes the same risk, and no adjustments are made to an insurance policy of this kind.
A few weeks later, you get a notice from your district court informing you that you must settle a claim brought against you by a third party due to the accident. You learn that the buyer of your automobile was engaged in an accident in which he was thrown from his bike into another bike. Because you remain the policyholder, he filed a claim with his insurance company, which was rejected. As a result, the legal responsibility for compensating the losses of a third party to whom the buyer caused harm falls on your shoulders.
Both situations seem to be irrational and unjust, don't they?
Unfortunately, the legislation is written so that it forces people to transfer their insurance policies as soon as possible after a second-hand automobile transaction is completed.
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