Commercial Vehicle Insurance Transfer: What Buyers Must Know

Insurance does not automatically transfer to a new owner along with RC ownership — it requires a separate process, and under Section 157 of the Motor Vehicles Act, it must be completed within 14 days of the sale. During this 14-day window, only the third-party section of the policy automatically extends to the new owner; the own-damage section does not transfer until the insurer formally endorses the policy. Miss this, and a claim during that gap can be rejected entirely.

The Mistake Almost Everyone Makes

Most buyers assume that once the RC shows their name, the insurance is "handled" along with it. It isn't. RC transfer and insurance transfer are two separate processes handled by two separate authorities — the RTO for one, the insurer for the other — and completing one doesn't automatically complete the other. This gap is exactly where buyers get caught out: driving a "properly registered" vehicle that isn't actually covered the way they assume it is.

What Happens in the 14-Day Window

For the first 14 days after a sale, the law provides limited automatic protection: the third-party liability section of the seller's existing policy extends to the new owner. But the own-damage section — the part that actually covers your vehicle if it's damaged — does not transfer automatically. It only takes effect once the insurer has formally reviewed and endorsed the policy in the new owner's name.

This means that if your vehicle is damaged in an accident during this window, before the formal transfer is complete, you may find yourself covered for third-party liability but not for your own vehicle's damage.

Documents You'll Need

• Updated Registration Certificate showing the new owner's name (or Form 29, if the RC hasn't been updated yet)
• Valid ID proof of the new owner
• Valid address proof
• Proof of sale (sale agreement or invoice)
• The seller's original policy document
• A formal transfer request submitted to the insurer

The Process, Step by Step

1. Gather the required documents
2. Submit a formal insurance transfer request to the insurer — this can typically be done online or offline
3. The insurer verifies the submitted details and may inspect the vehicle before finalizing
4. Pay the applicable transfer fee
5. The insurer issues an endorsement document confirming the policy is now in the new owner's name

The buyer carries the primary responsibility here — the insurer will only proceed once the buyer initiates the transfer, so this isn't something that happens passively just because the sale went through.

What It Costs

The transfer fee is typically modest — commonly in the ₹50–500 range, plus a possible inspection fee if the insurer requires one. Confirm the current amount directly with the insurer, since charges can vary. This is a small cost relative to the protection gap it closes.

What Happens If You Skip This

If the transfer isn't completed, several real problems follow: the new owner's claim can be rejected in the event of an accident, the previous owner remains legally linked to the policy and can still be held liable for third-party damages, and any dispute arising from an incident during the untransferred period becomes considerably harder to resolve cleanly for both parties.