covers your car against risks like theft, accident, explosion etc.
It is that time of your journey when you decide to shift gears and change your car. It is required that you make sure that there are minimum hassles on the way with regard to your car insurance.
It is frequently misunderstood as to what the implications of transfer of ownership would be when it comes to insurance Coverage – would it be transferred? Would the car insurance remain in the same name as that of the old owner? Would the Premium change with new car ownership?
Fortunately, not everything associated with insurance premium is Greek and Latin. Some things can be sorted out by making sure some simple formalities are taken care of, without leaving it for a later point in time.
Car insurance gets transferred when car is changed: This is one of the first thing that you need to know when you change your car. In the past, there have been instances where claims have been neglected or refused by insurance companies on the pretext that the cars have changed hands and the owners have changed. This has resulted in much confusion and also in some law suits from the disputing parties. The good news is that the results of such disputes have been favourable to the consumer, and the courts have decreed that insurance companies need to honour claims associated with new cars.
Well, you would only need to give in writing to the insurance provider stating that cars have changed hands. This would follow completion of fresh proposals, along with an administrative fee that needs to be paid to effect such transfer. There could also be some adjustment done on pro-rata basis with regard to any No Claims Bonus involved, to fill the space between the time of transfer and the original date of expiry of the car insurance policy.The only aspect to be taken care of is that you would have a period of two weeks within which to notify the insurance provider of such change in ownership if the transfer involves comprehensive policy, to make sure that own damage claims are honoured after the new ownership has come into effect.
It may be noted that NCB or the No Claim Bonus is a benefit to the Insured and not for the car. It is the driver who has not made claims, not the car that changes hands. So, while there may be no hassles in transferring the Policy to the new owner of the car, the NCB stays on with the original insured who has not processed a claim yet. This benefit can still be used by the original insured when it comes to the insurance premium associated with the new car that they have purchased.
As you can see, not everything is complex in the world of car insurance, as long as they are taken care of in a timely manner.