What is Used Car Insurance?
Used car insurance is a type of car insurance policy meant to protect second hand, used or old cars. It safeguards a used car from any unpredictable dangers and adversities that may lead to major loss or damages like a road accident. An old car insurance policy provides the same level of coverage that a new car gets under a standard car insurance policy. Thus, a second hand insurance policy covers the used car from both third party liabilities and own damage risks.
Why Should you get a Second Hand Car Insured?
Buying car insurance policy is important for all car owners, irrespective of it is a new or second hand car. If you want to know why you need to buy a second hand car insurance under a used car insurance plan, take a look at the reasons below:
- Protects from All Risks – The basic purpose of a comprehensive car insurance policy is to keep an insured car safe from all kinds of damages and losses. With the help of a second hand car insurance policy, your used car will be secured from all kinds of unforeseen risks, such as fire, accidents, natural calamities, manmade hazards, etc.
- Compulsory for All Cars – As per the Indian Motor Vehicle Act 1988,all cars plying on public roads should be covered under a valid car insurance policy. The law applies to both new cars and second hand cars. Therefore, if you don’t want to be penalized for using your second hand car without insurance, you must get it insured under a used car insurance policy.
- Covers Third Party Liability – If your second hand car causes damages to a third party property or bodily injuries to a third party person in an accident, you will be liable to pay for it. But if you have a second hand car insurance policy, your insurance company will take care of your third party liabilities and pay for them on your behalf.
- Personal Accident Cover – A used car insurance policy not only covers your second hand car from all the risks but also protects the owner-driver of the car from any accidental injuries. Thus, in case you suffer an injury in a car accident then your insurer will cover the treatment cost.
How to Transfer Ownership and Insurance of Second Hand Car?
At the time of buying a second hand car, you will be required to transfer the ownership of the car and its existing car insurance policy to your name. Since every car in India needs to be mandatorily insured, the used car that you are buying will also be covered under a car insurance policy unless it has expired.
In most cases, the second hand car will come with an insurance policy with some time left until its renewal. In such a scenario, you must ensure that you get your existing car insurance transferred to your name within two weeks, just like a car registration certificate.
To transfer the ownership of the existing car insurance policy, follow the steps given below:
- Visit the Regional Transport Officer (RTO)
- Fill up an application to transfer the ownership of the car by transferring the RC of the car on your name
- Submit all the documents required
- Once the RC has been transferred to your name, fill up the fresh proposal form
- Submit the policy form along with all the required documents
- Pay the policy transfer fee
- The motor insurance company will transfer the policy to your name
Make sure to cross-check your name and details on RC and the motor insurance policy after the transfer has been made.
Documents Required to Transfer Ownership of a Used Car Insurance Policy
Take a look at the list of documents that you need to submit to transfer the ownership of a second hand car insurance policy:
- Original Registration Certificate or RC of the used car with the buyer’s name on it
- Form 28, 29 and Form 30 signed by the previous owner of the second hand car
- Copy of the existing car insurance policy
- Existing policy document
- Certificate of Insurance
- New proposal form
- No Objection Certificate (NOC) from the previous policyholder
- Proof of transfer of RC and payment of transfer fee
- New copy of RC
- No Claim Bonus (NCB) difference amount (if any)
How to Buy New Car Insurance for Second Hand Car?
In case the used car that you are buying does not come with an existing car insurance policy, then you will have to buy a second hand car insurance policy for it. The procedure to buy new car insurance for second hand car is very quick and simple. You just need to follow the steps given below to buy a used car insurance policy for your second hand car:
- Visit Policybazaar.com and navigate to the ‘Car Insurance’ page from the ‘ Insurance Products’ menu
- Enter your car number or choose to proceed without providing the car number
- Provide the required details, including the city & the RTO, make and model of the car, year of registration, etc.
- Choose the fuel type of the car between petrol, CNG, diesel and external CNG kit
- Enter your personal details, such as name, email id and contact number
- Check the car insurance premium plans of multiple insurers Choose an old car insurance plan that suits your coverage needs and your budget
- Select any add-on cover that you want to add to your plan
- Pay the final insurance premium amount via online payment modes
- After the payment is made, your second hand car insurance policy will be issued. You will receive your used car insurance policy papers at your email id.
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Why Should You Buy Second Hand Car Insurance from Policybazaar.com?
Buying a car insurance policy is an effortless and speedy process if purchased online at Policybazaar.com. It is one of the most popular insurance brokers in India offering a variety of insurance plans, including used car insurance. If you are wondering why should you buy second hand car insurance policy from us, take a look at the reasons below:
- Speedy Process – Policybazaar.com is a user-friendly website that values the time of its customers. As a result, the whole procedure of buying second hand car insurance is very quick and simple. You just have to provide the required information and follow the step-by-step process and you will be issued with a second hand car insurance policy instantly.
- Compare All Used Car Insurance Plans at One Place – One of the most attractive benefits of buying insurance from Policybazaar Insurance Brokers Private Limited is that you can compare used car insurance plans offered by different car insurance companies. Plans can be compared based on the coverage offered and the premium charged so that you can objectively decide the plan you want to buy. Thus, it helps you make an informed decision.
- Saves Money – Buying a second hand car insurance online saves both time and money. Besides, online plan comparisons help to find a second hand insurance plan that provides the coverage of your choice and fits within your budget. Thus, you end up saving a lot of money.
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Things to Check before Buying a Used Car in India
It is natural to be all excited when buying a second hand car. However, you need to ensure a few things before buying the used car so that you don’t face any troubles later. Here is a check-list that you can follow at the time of buying a second hand car:
- Condition of the Car – The first thing that you need to check while buying a used car is to check its condition. Take the car for a test drive and closely pay attention to how it is working. If required, get it checked by a mechanic to get a better idea of its condition, especially the engine, wheels, transmission, cooling, etc.
- Ownership of the Car – While buying a second hand car, verify if the seller is the actual owner of the car. Cross-check the details on the RC with the information provided by the seller. Also, check the ownership history of the car.
- Valid Car Insurance – Check with the owner of the used car if he has a valid car insurance policy. If yes, then you will have to get it transferred to your name within two weeks of purchasing the car. If not, then you will have to buy a new used car insurance policy for your second hand car.
- Car Insurance Claim History – In case you are buying a used car and planning to get the existing car insurance policy transferred to your name, you must check the claim history of the old car. You can get the details on claim history from the insurance company by providing the existing policy number.
- Important Documents – Make sure to check the documents, such as original invoice of the car, car servicing bills, pollution certificate and municipality certificate (if any) at the time of buying a used car as you may be required to produce these documents at the time of transferring the ownership of the car or its insurance.
- Possibility of Modifications – While using a second hand car, make sure to check if it is possible to modify the vehicle for greater comfort, safety or value. This way you won’t feel stuck later if you want to make some changes in the car.
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Ans: Buying a second hand car comes with several benefits. Take a look at some of them below:
- More Affordable - Used cars are available for a lower price as compared to buying a new car of the same model. This is because depreciation is applicable on second hand cars that reduce the market value of the car.
- Lower Premium - The cost of second hand car insurance is lower than the price of car insurance for a new car. This is because the Insured Declared Value (IDV) or the market value of the used car is lower due to depreciation. As a result, it ends up lowering the premium amount charged by the insurance provider.
- Lower Repair Cost - Repairing a new car is more expensive as compared to a second hand car. Therefore, you will have to pay less money to repair your used car.
Ans: The insurance premium of used car insurance may vary from one vehicle to another. The condition of all second hand cars is not the same, besides the age and value of the car also differs. Moreover, different motor insurers may charge a varying premium amount for a second hand car insurance policy. Thus, the best way to check the cost of second hand car insurance is to visit an insurance broker, such as Policybazaar.com, and check the used car insurance prices offered by different insurers before buying any one.
Ans: Yes. The premium charged for a second hand car insurance policy is lower than the insurance cost for a new car. This happens because used cars have a lower IDV or market value as opposed to a brand new car of the same model. Thus, it reduces the cost of a used car insurance policy even though the level of coverage remains the same.
Ans: If you forget to transfer the existing car insurance for your second hand car to your name, then you won’t be able to make any claims with the insurance company in case of an emergency. Whether it’s a third party loss or own damage, you won’t be able to get help from the insurance company. Moreover, the previous owner of the car may end up getting a court notice to pay the third party liabilities for the accidents caused by the new owner.
Ans: Yes. The third party car insurance cover is automatically transferred to the new owner of a second hand car. However, you won’t be able to make a claim unless you get the existing car policy transferred to your name.
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