Used Car Insurance/Second-hand Car Insurance

Why Is It Important to Insure Second-Hand Cars?

1. Protects Against Damages:

Comprehensive car insurance policies for used or old cars protects you from financial losses in case of any mishaps, like accidents, fire damage, or natural disasters.

2. Mandatory for All Vehicles:

According to the Motor Vehicles Act, every car in India should atleast have a third-party car insurance.

3. Third-Party Liability Coverage:

If your used car causes harm or injury in an accident to another car, the third party insurance policy will cover these damages.

4. Personal Accident Coverage:

A second-hand car insurance plan also provides coverage for injuries or accidental death of the owner/driver along with providing protection to your car.

5. Theft Protection:

If you insure your second-hand car, you are protected against theft.

How to Transfer Ownership and Insurance of a Second-Hand Car

When you purchase a used car, two crucial steps involve transferring ownership and transferring the existing insurance policy. Here are the steps to follow:

Step 1. Visit the RTO: Visit the nearest Regional Transport Office (RTO) and apply for vehicle ownership transfer.

Step 2. Submit Documents and Fees: Provide all necessary documents and pay the required fees for the ownership transfer.

Step 3. Contact the Insurer: After the RC transfer is complete, get in touch with the insurance company to transfer the policy to your name.

Step 4. Submit Documentation: Submit a new proposal form along with the necessary documents and pay the insurance transfer fees. The insurance company will then transfer the policy to your name.

The documents required to transfer ownership of used car insurance are -

1. Original Registration Certificate or RC with the previous owner’s name on it
2. Form 28, 29 and 30 of the previous owner of the car
3. Copy of the running car insurance policy
4. Current car insurance policy document
5. Certificate of Insurance
6. New proposal form
7. No Objection Certificate (NOC) from the previous owner
8. Proof of RC transfer and payment of transfer fee
9. New RC copy
10. No Claim Bonus (NCB) difference amount

How to Buy/Renew Used Car Insurance Policy Online

Purchasing or renewing used car insurance online is a very easy process. Here's a step-by-step guide:

1. Visit the Website: Go to the website of the insurance company, or visit www.insurancedekho.com.

2. Enter Vehicle Details: You need to provide details of your car like model, registration date, registration number, fuel type, etc.

3. Choose Insurance Plan: Choose the type of insurance you prefer for your loved car, either third-party or comprehensive.

4. Provide Previous Insurance Details: Enter details of your previous insurance policy, including the policy expiry date, claims history, and No Claim Bonus details.

5. Receive Insurance Quote: You'll receive a quote for the insurance plans, along with their premium amount.

6. Add-Ons: If you choose a comprehensive insurance policy, you can enhance your coverage by buying add-ons for a small increase in premium.

7. Payment: Complete the payment process using available digital payment methods.

8. Receive Certificate of Insurance: Once the payment is confirmed, the Certificate of Insurance will be sent to your registered email.

Points to Remember While Buying Second-Hand Car Insurance

When purchasing insurance for a used car, it's essential to make informed decisions. Here are some key considerations:

1. Compare Insurance Plans: Before buying second-hand car insurance, compare plans offered by different insurers and thoroughly read their terms and conditions.

2. Determine the Value: Calculate the current market value of your old car to determine the Insured Declared Value (IDV), which directly impacts the insurance premium.

3. Depreciation Rate: Be aware of the rate of depreciation for your car, as it affects the claim settlement amount during repairs or replacements.

4. Add-On Covers: Inquire about available add-ons such as Engine Protect cover, Passenger cover, and consumables cover, as they can enhance your coverage.

5. Claim History: If switching insurers or renewing an existing policy, understand the claim history of the previous insurance policy. A no-claims history can lead to discounts through the No Claim Bonus (NCB).

6. Additional Discounts: Install anti-theft/security devices on your old car to reduce the insurance premium and mitigate the risk of theft.

7. Claim Settlement Process: Choose an insurer with a straightforward and hassle-free claim settlement process and a quick turnaround time for claim settlements.

8. Policy Transfer: Ensure you transfer the insurance policy within 14 days of purchasing a second-hand car or purchase a new policy according to your requirements.

9. Inspection: While buying insurance for your second hand car, you can either get the existing policy transferred to your name or get a new policy just for you. In either of the cases an inspection would be required to be done to determine the condition of the car

Factors Affecting Used Used Car Insurance Premium

Several factors influence the premium for second hand car insurance, including:

1. Make and Model: The make and model of the second-hand car significantly impacts the premium. High-end car models have slightly higher premiums due to their increased market value.

2. Current Market Value: The market value of the car, known as the Insured Declared Value (IDV), directly affects the premium. A higher car value results in a higher premium.

3. Mileage: The number of kilometers driven by the car affects the premium. Higher mileage may lead to a higher premium.

4. Geography: Where exactly does your car run also determines the car insurance premium. If you live in an area with poor roads or in an area where there are too many cars, your car insurance premium might be higher.

5. Inspection: Since an ownership changes while buying a used car, Insurance companies believe that the risk of the car also gets transferred. In lieu of that, used cars more often than not are required to undergo inspection to check for the condition of the car. The inspection can either be a self-inspection or through a third party inspection based on the choice of the user.