Selling your old bike for a new one or when buying a car is quite common. Since you are moving on to a new vehicle it makes sense to sell the existing one and get some funds against it. Buying a second-hand bike is also a popular choice as you get to own a bike at an affordable rate. The automobile sector has also simplified buying and selling used bikes. You can buy or sell used bikes through specified dealers or online. In fact, the online platform provides a simple way to transact used bikes and has become popular.
Though buying and selling used bikes is simple and popular, do you consider the vehicle insurance aspect? Since vehicle insurance is mandatory, you should know how the insurance cover on the bike is impacted in case of purchase or sale of used bikes.
Here are 10 insurance tips which you should keep in mind when you buy or sell a used bike:
1. Make a correct valuation of the bike: The first step in selling or buying a used bike is the bike’s valuation. If you are a seller, you should be careful in valuing your bike. If you fix a very high price, you wouldn’t get many buyers. If you, on the other hand, are a buyer, find a bike whose price is proportionate to the age and condition of the bike.
2. Intimate the insurance company of the change in ownership within the specified time period: After the bike is sold or bought, the insurance company should be informed of the change in ownership. Intimation should be given to effect a change in the name of the policyholder within 14 days of selling or buying the bike.
3. Transfer the insurance policy in the buyer’s name: In case of a second-hand bike, the insurance policy should be transferred in the name of the buyer. It is the buyer’s duty to get the policy transferred in his name after buying a second-hand bike. Even the seller should help the buyer get the policy transferred in his name.
4. The RC Book should also be updated: The first step in changing the documentation of the bike is changing the RC Book. The RC Book should reflect the name of the buyer. To change the RC Book, the RTO should be informed. You have to get the RC Book changed from the RTO where you registered your bike. Once the RC Book is changed the insurance policy can be transferred.
5. Submit the relevant documents to the RTO for a change in the RC Book: To get the RC book changed, the RTO requires specified documents. These documents include Forms 28, 29 and Form 30. These forms, along with the RC Book, PUC certificate of the bike, road tax details, etc. should be submitted to the RTO so that a new RC Book is issued with the buyer’s name.
6. Submit the old insurance policy to the insurance company for a new one: To get the policyholder’s name changed in the bike insurance policy, the old one should be submitted to the insurance company so that they can issue a new policy with the buyer’s name.
7. Know the validity of insurance coverage before the insurance policy is changed:Once the bike is sold or bought, the existing insurance policy continues till the name of the policyholder is changed. The third-party cover continues for 14 days after the change in ownership of the bike. It is expected that the policy would be changed within such 14 days, depending on the terms of the insurance company. Own damage cover in the comprehensive insurance policy, however, is not available during this period. It would be applicable after the policy is transferred.
8. Changed RC Book is not mandatory for affecting a change in the policy: Though the new RC Book is required to transfer the insurance policy, it is not mandatory. If the RTO has not issued the new RC Book and you want to change the insurance policy you can inform the insurance company about the same. The company would transfer the policy and later on, you can submit the new RC Book when you get it.
9. Choose add-ons if required: When you transfer the bike insurance policy you can choose add-ons for comprehensive insurance. Choose the required add-ons for making the policy more inclusive.
10. Retain your NCB: When you sell your bike you can retain the accumulated NCB to be used in the new bike insurance policy that you buy. The NCB is not transferred to the buyer. You can request an NCB certificate from the insurance company and retain your NCB for a new bike insurance policy
Whenever you are buying or selling your bike, remember these insurance tips for a smooth change in ownership of the bike and the vehicle insurance policy too.