Ramifications of Neglecting the Transfer of Insurance for a Pre-Owned Bike


Bike insurance is one of the essential aspects that bike riders have to take care of when they buy a new or second-hand bike.

Now, suppose you buy the pre-owned bike, which is one of the cost-effective and convenient options for having your own two-wheeler vehicle. However, what if you, as the owner, get the bike transferred in your name but neglect the transfer of their bike insurance policy?

It can lead to various potential issues and consequences.

So, in this article, we will discuss the consequences of not transferring the bike insurance, the penalties of not having a valid bike insurance and how to proceed with the process of bike insurance transfer online.

 What Happens If Bike Insurance is Not Transferred to a New Bike Owner?

 Implication for Seller

  1. Loss of Non-Claim Bonus

If you do not transfer the bike insurance policy to the new owner, you can also lose the non-claim bonus on your policy, which might otherwise save the cost of premiums and benefits for both the sellers and the buyers.

  1. Liability Concerns

If the seller doesn’t transfer the insurance then in the eyes of the insurance company the seller could still be seen as the owner of the vehicle. It might make them responsible for any accidents or incidents that occur after the sale takes place.

 Implications for Buyer

  1. Claim Rejection

Life is all about uncertainty; therefore, there might be a chance that someone will steal your bike, or there might be chances of accidents, damages or collisions. But in such cases, without having the policy in your name, you can’t claim the insurance, as insurance providers have all right to reject it in such cases.

  1. Legal Consequences

According to Indian law, bike owners must have at least a third-party bike insurance to ride their bikes on Indian roads. However, if you lack valid insurance, you might have to pay the legal consequences and penalties, which we will discuss below.

 What is the Penalty For Not Having Two-Wheeler Insurance For a New Owner?

If you find riding a bike on the road in India without insurance, you may have to pay a fine of ₹2,000 or imprisonment of up to 3 months.

And if you again find yourself doing the same offence, you will be liable to pay ₹4,000 or imprisonment of up to 3 months.

Apart from that, you might have various other consequences, like

  • Licence suspension
  • Personal liability for the loss and damages
  • No coverage for damages
  • Difficulty renewing registration
  • Potential loss of no-claim bonus

Note: Fine/punishment for not having a valid two-wheeler insurance will vary from state to state and these are approximate values.

 How to Transfer Bike Insurance Online?

1. Documents Required to Transfer Bike Insurance

For Regular Transfer

  • Registration Certificate of the two-wheeler
  • Original insurance policy
  • Forms 28, 29, and 30
  • The sale deed of the two-wheeler
  • Ownership transfer paperwork
  • Insurance policy premium payment history
  • No Objection Certificate (NOC) from the previous owner
  • Address proof of the buyer
  • Buyer’s passport-size photograph

Additional Documents In Case of Owner’s Death

  • Form 31
  • Insurance certificate of the vehicle
  • Death certificate of the deceased owner
  • Pollution control certificate of the vehicle
  • PAN card and Form 60 of the new owner
  • Chassis and engine pencil prints of the vehicle
  • Date of birth certificate of the new owner
  • Document showing the relationship of the deceased owner with the new owner
  • Signature of the seller
  • Completion of Form 20 for bike verification information

2. Process of Transferring Bike Insurance

  • For an insurance transfer for a bike online with a reputed insurer like Tata AIG, whether its third party, standalone or comprehensive bike insurance policy, the new buyer must apply for an insurance transfer within 14 days of ownership change on the insurer’s website.
  • Collect required documents: RC, ownership proof, original policy, dealer’s details, and premium payment history.
  • Submit KYC documents for both seller and buyer and keep a record of this transfer; carry your PAN card, Aadhaar card, driver’s licence, and other official documents.
  • Here, you will also get the option of extending coverage by adding another vehicle (seller’s option) or other coverage options, noting potential premium changes.
  • The seller must show proof of third-party insurance for accurate future premium estimation.
  • You can also preserve a No-claim Bonus (NCB) by providing an NCB certificate for savings on the new policy.

Note: After 14 days, the new bike owner should obtain fresh insurance due to the expiry of existing third-party coverage.

3. Make the Payment

Then, finally, you can make the payment to the RTO by transferring the fees of ₹30 to ₹35, which may vary from state to state. However, the smart card fee levied by the RTO is ₹200.

 Wrapping Up

One can transfer the bike without insurance, but knowing the implications will teach that it is not the best practice to consider. In such cases, both the sellers and the buyers face the implications.

Thus, to avoid such a situation, the seller must initiate the bike insurance transfer process within 14 days of transferring the bike, through which both the seller and buyer can have peace of mind.

However, if you have insurance from a reliable company, then you will smoothly transfer the insurance with their friendly website and support with ease. Good Luck!

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