I want to sell my car, which was insured only last month. Can I ask the insurance company to refund me the premium amount for the remaining time? Is the policy transferable and can I take the premium amount from the new owner? - Deepak Rawat, Dehradun
Generally, while selling a car it’s a good practice to cancel the insurance policy and to transfer the No Claim Bonus (NCB) – usually a discount of 20-50% on the Own Damage Premium of the car to another car that a seller may be purchasing. This is since the NCB belongs to the car owner and not to the car, therefore the NCB is not transferable. For cancelling your car insurance policy, you may request your Insurance company in writing with a request to cancel the policy along with a filled copy of Form 29 and Form 30 for making an application and notifying the Regional Transport Authority (RTO) with respect to the change in the ownership of the car. Further, the insurance company may also ask you for the submission of the original policy certificate and proof of delivery of the vehicle to the new owner. The NCB certificate issued by the insurance company is valid for 3 years and you can utilize it for insuring your new car.
However, in case you wish to transfer the car insurance to the new owner, you may factor for the same in your sales price. But since the insurance contract is between the insurer and you, the same cannot be automatically transferred. As per the Section 157 (2) of the Motor Vehicles Act, the new car owner needs to apply to the insurance company within 14 days of car purchase/transfer for the transfer of the car insurance policy in his name.