BACK TO MVA INDEX
MVA 1988 (Amended 2019)ORIGINALChapter VII
Section 154-157
Saving of Rights; Duty of Insured to Notify; Transfer of Certificate; Duty to Surrender Certificate
Insurance of Motor Vehicles Against Third-Party Risks
Fine: N/ACompoundable: N/AEndorsement: No
BARE ACT PROVISION
Legal Text
Section 157: Where a person in whose favour the certificate of insurance has been issued, transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken, the certificate of insurance and the policy described in the certificate shall be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred with effect from the date of the transfer. (2) The transferee shall apply within fourteen days from the date of transfer in the prescribed form to the insurer for making necessary changes in regard to the fact of transfer in the certificate of insurance and the policy described in the certificate in his favour, and the insurer shall make the necessary changes in the certificate and the policy of insurance in regard to the transfer of insurance.
Simplified Explanation
Sections 154–157 address the administrative mechanics of the insurance framework. Section 157 is the most practically significant: when a vehicle is sold, the insurance certificate and policy automatically transfer to the new owner by operation of law from the date of transfer. However, the new owner must apply to the insurer within 14 days to formally update the insurance records. This provision protects buyers of used vehicles — the vehicle does not become uninsured the moment it changes hands. However, the 14-day formal update is important: if an accident occurs during the transitional period, the insurer may dispute the claim if the new owner has not initiated the transfer process. Section 155 requires the vehicle owner to notify the insurer of any accident — failure to notify may give the insurer a technical ground to dispute own-damage claims (though not third-party claims, which are protected under Section 149).
Historical Context
Section 157's automatic insurance transfer is a critical consumer protection — it prevents the gap in coverage that would otherwise exist in every used vehicle sale, potentially leaving innocent third parties unprotected.Critical Changes
Online insurance transfer available through insurer websites and IRDAI portals.
14-day window for formal transfer application preserved.
Practical Scenarios
"Buying a used car on 1 January — insurance automatically transferred from that date; formal update application must be filed by 15 January."
Common Queries
Yes — under Section 157, the insurance policy transfers automatically to you from the date of transfer. However, you must apply to the insurer within 14 days to formally update the records. Failure to do so may complicate own-damage claims, though third-party protection continues.
Yes — the insurance automatically transfers under Section 157 from the date of transfer. You are covered even before the 14-day formal update period expires.