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Query regarding motor insurance ownership transfer

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24 Nov, 2022 by  Avinash Sonee


A person has a '2 wheeler or car' full insurance policy (TP + CPA + OD).

The vehicle is sold to another person.

I've the following queries

  1. After RC transfer, the insurance policy can be transferred to the new person after collecting NCB difference amount and xxx charges?
  2. Is this insurance transfer applicable to TP + CPA + OD? or only TP + OD?
  3. If it is only applicable to TP + OD and not CPA. Then should the new owner take a separate CPA cover as it is mandated by IRDA?
  4. Can the old owner cancel his CPA component policy for pro-rata refund? Is it possible since it is a package policy?
  5. If the new owner has a NCB retention letter from his earlier motor policy, can this be applied to the transferred policy? How will this discount be applicable as the policy is in mid-term?

Thank you

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1 Answer

Regional Director, Amicus Insurance Broking

When package policy is transferred to new owner on sale of vehicle, the policy is transferred as a package including OD+TP+CPA, after taking NCB recovery. The CPA is an integral part of the package and not a separate policy. CPA was given to the previous owner-driver basis ownership of the vehicle and not on stand alone basis.

Whilst on this, it is advantageous to go for a one year policy rather than on short period basis for the balance period available under the existing policy. This ensures that upon renewal the new owner will be entitled to NCB if there are no claims.

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