Everyone cannot afford to buy new cars, for people whose economic conditions do not fit in the car budget, they prefer to purchase used cars or second-hand. The sales for second hand cars have drastically increased. Owning a vehicle is not just about selecting the best brand, selecting the best car model and the best price. Owning a car is also about the successful transfer of ownership from the seller to the buyer. 

When you are buying a used car the most important step is to transfer the registration. The buyer should understand this as it is a very important step in the purchasing process and thereafter. Many car users are not aware of this process. This step is more important than transferring car insurance and it should be done prior to transferring your car insurance. Once the transfer of registration is done you can proceed to transfer car insurance. 

When can you transfer Car Insurance?

If you sell your car then you have to transfer the car insurance to the new owner. As per the guidelines issued by the UAE insurance authority, insurance is related to the car and not to the car owner. The new car owner has a certain number of days to inform the transfer of car ownership. The next process will be to transfer the car insurance. The transfer of insurance should be done as soon as possible. If the car insurance is not transferred to the new owner and if there is any car accident while driving, the car insurance claims will not be paid by the insurance company. The reason why the insurance company does not pay claims is that the car owner’s name and other details such as registration certificate, insurance policy documents do not match with the new car owner. 

The transfer process of car insurance should be done immediately once the car is sold and documentation paperwork of car ownership is completed. Once the vehicle transfer is completed, the transfer of car insurance is very simple. It just requires some documents to sign and complete the paper formalities. 

Click here to know Process of expired car insurance renewal

Documents required for transfer

The following are the documents required for the transfer of car insurance. 

  1. Document and Certificate of existing policy
  2. No objection certificate from the former owner
  3. Completed Application form
  4. Registration certificate
  5. Car Inspection report (The Car Inspection should be done by authorized personnel)

After the above mentioned required documents are submitted, the Transfer fee, premium amount, adjustment of no claim discount, have to be settled. 

Insurance Transfer Process

The insurance transfer process has to be initiated with the new car owner. The new car owner can also contact the insurance agent to initiate the process. The above-listed documents are required to be submitted by the new car owner for the change in the name of the insurance policyholder. The insurance company also suggests the change in policy and also add-on services to the new owner.  

If the change in name application form has not been completed within the time then the insurance policy will become void. No insurance claim or discount or refund will be provided if there is any accident to the car before with the change in name of the new car policyholder. It is best advised to drive the car only when the car registration and insurance transfer process is fully completed. 

Click here for What is Roadside assistance cover in car Insurance

Incomplete transfer process

Once the car ownership is transferred the new owner has to ensure that insurance is also fully transferred into their name. If the insurance process is incomplete, the new owner will not get any claims for the damages. In the more serious cases the vehicle may also get confiscated by the legal authorities. The ownership and insurance has to be fully transferred to the new car owner. 

It is very risky to drive without proper documentation in the UAE. The previous owner should cooperate with the new owner in completing the transfer process. Transfer of car insurance may be put on hold as incomplete if proper documents are not submitted, if no clearance is issued from the previous owner, incomplete application form, no car inspection is done, no car registration certificate is submitted and other reasons. 

The new owner’s responsibility is to get to the authorities and have these documents submitted and get it cleared. Once the clearance is issued transfer of car insurance will be completed. 

Can No claims bonus be transferred?

If no insurance claim is made by the insurance policyholder during a year then no claim bonus accumulates. The insurance company as a reward offers no claim bonus to the policyholder. For every claim free year this discount increases in proportion to 10%, 20% and some insurance companies provide upto 50%. This percentage is provided as a discount on insurance policy during the renewal of the policy. 

If the car owner has sold his car and there is a no claim discount which is accumulated then it cannot be transferred. No claim bonus is an appreciation for good driving and not making any claim on insurance. It is related to the car owner and not to the car. If the car is sold and ownership is transferred then no claim bonus cannot be transferred. No claim discount can be transferred from one insurance company to another. It cannot be transferred to the new car owner.  

Takeaway

Everybody cannot afford to buy new cars, if you are thinking to buy used cars or second hand cars, they are affordable and come within your budget. There are two most important things to remember when buying used cars. The first thing is transferring your car ownership and the second thing is transferring car insurance. Once you have these two completed, then you can drive happily without any hesitation. Car ownership gives you the satisfaction that you own a car and insurance policy transfer gives you protection to you and your car. Drive safe and reach your destinations safely. 

Meet the author
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Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.

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Vinay Kumar
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.

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