The Motor Vehicles Act of 1988 makes it mandatory to have a vehicle insurance policy for all cars that are registered in India. Car owners have two choices, either to opt for third-party coverage or comprehensive plans. A policyholder makes the choice based on their coverage requirements between a liability-only or comprehensive policy. 

Now when it comes to transferring the policy on the death of the policyholder depends on the condition of the car. Although the death of the policyholder is a tragic event, the family or needs to transfer some crucial paperwork. This includes car insurance too. Let us look at the transfer process for a car insurance policy on the demise of the policyholder.

Transfer of the car and its insurance after the death of the policyholder

In the event of an unfortunate demise of the policyholder, the car, as well as its insurance policy, get transferred to the legal heir. This transfer of insurance takes place when the policy is valid and active at the time of transfer. 

In case there is a lag between such transfer and meanwhile, the policy’s expiry date has elapsed, the renewal of such policy can be done by the legal heirs in their own name. This renewal process needs to be furnished with appropriate documents at each stage. The insurance company should be intimated at the earliest for transfer of such policy. 

Who are the entities involved in the transfer of car insurance on the demise of the policyholder?

For purchase of comprehensive or third party car insurance online, the policyholder and the insurance company are the parties to the contract of insurance. For offline purchases, the insurance agents act as the facilitator. However, after the demise of the policyholder, the following are the entities involved – 

Insurance company

The insurance company is the first entity that needs to be intimated about the transfer process of car insurance. It modifies the details of the policyholder and other related information on intimation of the same. 

Legal heir

If the policyholder mentions the nominee’s name on the policy, the policy gets transferred accordingly. On the contrary, in the absence of these details, the legal heir becomes the rightful beneficiary. 

Regional Transport Office (RTO)

Not only the insurance policy, but the car’s registration certificate also needs an amendment to reflect either the nominee or the legal heir. For that, the person should get the necessary details amended with the regional transport office of the concerned governing jurisdiction. There are a few documents that are required for transferring the registration certificate which includes No Objection Certificate (NOC) from a financial institution (if availed on finance scheme), original registration certificate, pollution under control certificate, chassis number, sales invoice of the vehicle, death certificate of the deceased owner/policyholder, address and identity proofs of the legal heir, certificate of succession, self-attested copy of Aadhar and other applicable forms as per the RTO guidelines.

At the time of transfer of the policy, the person should check the necessary amendments. 

Any changes need to be reported at the time of amendments. Further, additions to the policy can also be done at renewal date like adding new add-ons or upgrading the insurance cover to a comprehensive policy. A car insurance premium calculator is useful to assist you in balancing the premiums vis-a-vis the features of the insurance plan. 

To conclude, it is possible to change the deceased individual’s name on the car insurance policy but the points mentioned above should be kept in mind.