What you should know about Bike Insurance Policy after the death of the Policyholder

Posted on: Feb 11, 2022 | | Written by:

What you should know about Bike Insurance Policy after the death of the Policyholder

Published on February 11, 2022. EST READ TIME: 3 minutes

Riding without an insurance policy for bike is not only ill-advised, it is outrightly illegal. In fact, a basic third-party liability insurance policy is essential as it provides financial protection against any damage done to a third-party person or property. And if better coverage is your lookout, you should go for a comprehensive insurance policy which covers the damage to your own bike as well as third-party damage.

Now, no matter which type of insurance you choose, you need to know what happens in case the policyholder passes away. While no one wants to think about the worst-case scenario, preparing for the unexpected makes sense. To know more, read on.

Transfer of ownership

In case of the death of the policyholder, the ownership of the bike gets transferred to the legal heir. The bike insurance policy, therefore, also gets transferred to the legal heir. All this, of course, holds true if the policy is still active. In case the policy has expired, the nominee/legal heir can renew the policy in their own name or purchase a new insurance policy for bike to remain covered.

Who are involved?

There are three parties involved in transferring the ownership of the bike and insurance in the aftermath of the policyholder’s death.

- Insurer

The insurer should be intimated about the policyholder’s death at the earliest. This will aid in the timely clearance of potential hurdles, if any, and in the use of the vehicle. The insurer will be able to then modify the policy accordingly, and issue it in the heir’s name.

- RTO (Regional Transport Office)

The legal heir must approach the applicable RTO in order to transfer the Registration Certificate (RC) of the bike. They may, however, need a NOC (No Objection Certificate) from the financial institution if there’s an active loan on the bike. For a smooth and hassle-free RC transfer, you might need documents such as the existing RC, Pollution Under Control (PUC) certificate, death certificate, insurance policy, heir’s proof of identification and address, Form 31, and more, depending on the circumstances.

- Nominee/Legal heir

The nominee mentioned in the policy details is the legal heir. If it’s mentioned in the policy document, then the process is usually quick and convenient. However, if there is no mention of a nominee, then the policy is transferred to the natural legal heir, which for a married person, would be the spouse. Most cases usually have the spouse mentioned as the nominee. In case of single parents, the natural heir is the child. For more than one child, the existing legal framework and due process are responsible for deducing the heir. But if a specific name is mentioned, the process gets easier.

To transfer ownership of the policy after the policyholder’s death, you will need an RC, a death certificate of the policyholder, a succession certificate, RTO forms, notary-attested affidavit, self-attested ID and address proof, and more.

What you need to do before or while transferring the insurance policy

A situation involving death is always challenging, emotionally. But certain formalities need to be completed, and in a timely fashion, no less. So, it’s best to determine the legal heir first, to avoid unnecessary complications later. Approach the insurer and the RTO for transfer of both the insurance policy and the insured bike. Keep the required documents handy and have a digital copy of each for speedier resolution. And finally, consult a lawyer if required to facilitate a smooth transfer process.

The entire process of transferring an insurance policy for bike is simple, provided the heir is clear and consistent, and all the required documents are available. Also, do not ride the bike until the policy is transferred, as that means breaking the law. You might also attract fines and potentially significant out-of-pocket liabilities in case of an accident.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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