Learn How to Change Car Insurance Nominee Name

In India, motor vehicle laws stipulate at the minimum a third-party cover motor car insurance policy for driving on public roads. You can also purchase your own-damage car insurance policy which will reimburse you for expenses arising from the damage caused to your car after an accident. A comprehensive four-wheeler insurance policy combines third-party coverage and own damage, along with Personal Accident Cover and choice of unique riders.

The car insurance claim for own damage is paid to the policyholder. If the policyholder suffers injuries in the accident, the reimbursement for medical emergencies is also paid to them. But, what happens if the policyholder passes away due to the accident? Who will receive the claim benefits? The answer is the appointed Nominee!

Who is a nominee in car insurance?

A car insurance policy is a contract under which the insurance company will pay the sum assured if the indemnified event, namely accident or theft, occurs. Under an indemnity contract, like an insurance policy for a car, a person may nominate another to receive the amount due under the contract. Such a person is the nominee in car insurance. He/she is usually the spouse or any other close family member. A nominee is mentioned in the proposal form when you apply for a policy and is stated in the policy document.

While anyone can be named as the nominee, it is easier if the policyholder assigns their legal heir. This simplifies the settlement process and the compensation can be quickly given to the beneficiaries.

When does a nominee receive amounts under a policy?

The nominee in car insurance will receive the claim if the policyholder dies in an accident. Moreover, he/she will receive the proceeds under the policy if the policyholder dies after lodging a claim. In such circumstances, the funds received will come to the rescue of the family.

Can I change the nominee or add more nominees under my car insurance policy?

You can change the nominee under the car insurance policy. You can also add more persons as nominees. For example, if you took out a policy when you were not married, your parent or sibling would have been the nominee. After you are married, you may wish to make your spouse the nominee. You may add others to an existing nominee as per your wish.

How do I change the nominee in a car insurance policy?

When a policy document is issued, the nominee’s name is mentioned in it. When you want to change or add nominees, you must write a requisition letter to the insurance company. Based on your requisition, the insurer will make a note of the change in the policy document. This is known as endorsing the policy.

Endorsement is the evidence of the agreed changes in the policyholder’s details. The change is noted and recorded on the policy and the new details will be applicable after the endorsement is made. You can place a requisition either during the current tenure or at the time of renewal. You can also modify nominee details in a few other cases. For example, a name change of the nominee should be endorsed immediately. Only then do they become eligible to receive the money under the policy.

Is any additional proof required to change the nominee?

Removing a nominee and inserting another in their place or adding more names is purely as per the wish of the policyholder. No additional proof is required for endorsement or at the time of amendment.

Does changing a nominee affect my premium?

It is a general rule that any changes to the car should be notified to the insurer. For example, if you add specialized accessories or change the fuel kit to CNG, you must immediately inform the insurance company. If you don’t and the insurance company comes to know this at the time of processing a claim, it may lead to rejection of your claim.

Any of the above changes can lead to an increase in the premium. However, changing a nominee has no impact on the premium. It merely changes the beneficiary and has no role in modifying the policy conditions related to the computation of premium.

Is any permission necessary from a previous nominee?

There is no obligation to appoint a person as a nominee. It is just a measure to make the settlement process easier if the policyholder is no more. It is totally the discretion of the policyholder. Therefore, if a person is appointed a nominee and they are replaced by another, no authorization or permission is necessary from the first appointed nominee. Similarly, joint nominees are possible with their shares endorsed on the policy. Their shares can be modified again by another endorsement.

Should the nominee have a joint bank account with the policyholder?

When the insurance company settles the claim, it requires a bank account confirmation and sometimes a canceled cheque. However, there is no need for the nominee to hold a joint account with the policyholder to receive the funds on the settlement of the claim. They may provide details of their bank account when they have to receive the funds under the claim in the absence of the policyholder.

Including a nominee is a wise practice as delay in the payment of the claim can be avoided. Moreover, once a nominee is named it is not a permanent choice but can be modified at any time through a proper requisition and endorsement on the policy. Leading four-wheeler insurance providers like TATA AIG car insurance have easy online support to help with any changes in your car insurance policy.