Can I transfer car insurance to another person?

You can usually transfer car insurance to another person online, but they won't receive the same discounts that you did on your policy. Plan ahead to avoid a lapse in coverage.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

UPDATED: Sep 16, 2021

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Here's what you need to know...

  • Many auto insurance firms offer online platforms for transfer of insurance policies from one person to another
  • You don’t need to pay any transfer fees for car insurance
  • You can transfer auto insurance policy to the new car owner, but you can never transfer the no claim bonus (NCB)

Transferring auto insurance coverage is part and parcel of every new vehicle purchase.

Many insurance providers have simplified the process through online transactions and phone call notifications.

However, you may navigate through bumps here and there sourcing a good deal and organizing bank transactions for your new car in addition to arranging trade-ins or pick up schedules.

Thanks to the evolved technological advancements, the modern auto insurance services are extremely streamlined and efficient.

It is important however to take some caution to make the transfer right and legal. Make sure you transfer using the letter of auto insurance law. Several states take auto insurance lapses very seriously, and you’ll not be pardoned for any mistakes during the transfer process.

Your car dealer, the insurance company, and the financing bank should all be in sync to ensure a smooth transfer. Your auto insurance agent should be able to set the ball rolling and issue a valid auto insurance policy under the names of the new owner.

Compare car insurance quotes to make sure you pay the best rate possible.

What part do I play in a car insurance transfer?

Your auto insurance provider will do all the paperwork including the state filings, so you don’t need to worry about the process. Your only task is to inform your insurer of the new purchase and make a formal request for transfer.

Most insurance firms allow customers to make insurance transfer online. Check if your provider offers that option and you’ll simply log into your account and add the new car to your policy and drop the previous car from the cover.

Be careful to coordinate the dates to ensure that there’s no lapse in insurance coverage. It is advisable to allow a one day overlap to make sure that you’re safe.

If the car was purchased through a lender, the insurance company would ask for the details of your lender. This is basically to know who else has an insurable interest in the vehicle in case it is stolen or totaled.

Some insurers may allow this information to be keyed online or by phone while others will insist on hard copied documents delivered in person.

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Can I get additional coverage?

Most dealers usually don’t have comprehensive coverage or collision covers on the cars they sell. After the transfer, you may need to add extra coverages to your brand new car to be on the safe side.

Many insurance companies allow you to adjust your policy covers through online requests or phone calls. Shop around for the best deals before settling on a plan.

The adjustment may be made upfront without any cost, but you’ll receive a bill showing the additional cost which you can pay in the subsequent months.

Remember that many insurance firms will use this opportunity to update your policy coverage. Don’t get confused by the numerous options you’ll be given, take the time to shop around from different insurers to ensure that you’re getting a good cover at a reasonable cost.

Some questions they ask you Include:

  • the number of miles you cover to work
  • who uses your car most of the time
  • where you park the car overnight

All these factors may affect your insurance rates.

How to transfer car insurance to another user

The most common reason for transfer insurance covers is the change of vehicle ownership due to selling, purchasing, or inheriting a car. The first step is to put your vehicle registration documents in order.

Have the registration documents transferred to your name. You cannot complete a vehicle transfer without signing the title to your names. If you’re selling your car, you may also need to transfer the title to the new owner.

The Department of Motor Vehicles in every state has laid down procedures and forms to be cosigned for title transfer.

When buying any car, whether it’s brand new or second hand, the title transfer should be considered the first step. Transferring the insurance cover should follow the registration certificate transfer.

Sadly, many people drive away with the car without due process in policy transfer. This may be costly in case you are caught on the wrong side of the law, or you cause an accident on your way home.

The car insurance transfer goes hand in hand with the title transfer. Once the car is sold to a second party, the policy of the former owner is no longer valid.

In case of a claim, the insurance company will require the names on the policy document to match the names detailed in the car registration certificate.

This is important since the new owner should be able to recover any damage should an accident occur soon after purchasing the vehicle. Failure to inform the insurer of change of ownership will result in a denial of the claim.

In addition to the ownership transfer form, the following documents are required for the transfer of auto insurance policy:

  • New copy of the car’s registration certificate
  • Old policy document copy
  • No Objection Clause (NOC) signed by the former policyholder
  • New policy application form
  • Inspection Report that is usually carried out by the insurance company
  • No Claims Bonus difference value
  • No Claims Bonus

If the car being sold is a second-hand vehicle, the previous owner will still sign the transfer documents for registration and insurance but will be exempted from transferring the no claim bonus.

The No Claims Bonus (NCB) is typically a reward given to the policyholder for safe driving and making no claims.

At times, the old policyholders may choose to cancel the policy cover. If later on, they produce an NCB retention letter, the new insurer can offer discounts on their car insurance premiums.

The higher the number of years accumulated without an insurance claim, the higher the discounts.

Can I transfer my NCB?

While selling or buying a car, every component of the policy can be transferred except the no claim bonus. But if the car owner sells the car after the fourth year with the policy, they are entitled to a 45 percent discount.

When you purchase your new car, you will be able to access low premiums.

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How to transfer car insurance for a secondhand vehicle

To transfer a policy for a second-hand car, the insurance company will require the following documents to acquire the NCB retention letter:

  • A letter requesting for policy cancellation
  • Original copy of the policy
  • Auto Insurance Certificate
  • Notice of registration certificate transfer
  • Application for transfer of motor vehicle ownership

Investing in a new car requires precise planning and articulation to ensure that every legal requirement is met. To first-time car owners, a second-hand car is a significant investment, and no one would wish the process to go wrong.

If you are purchasing a new car, you will definitely need proof of insurance before driving off. But if you already have insurance on your previous car, you may be able to transfer your policy. It’s important to have the appropriate coverage, even if it’s for a short period of time. All you have to do is to contact the insurance company and let them know that you’re switching vehicles. Depending on the type of vehicle and the level of coverage, your insurance premiums may increase or reduce.

To get an accurate quote, you will need to submit information such as vehicle identification number, safety features, make and model of the vehicle, and year of the vehicle.

It’s your responsibility to ensure a smooth process of transfer of ownership to the new owner.

Don’t keep overpaying for the car insurance coverage you need. Compare quotes today to see how much you could save.



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