Insurance

Know These Things Before Buying an Insurance Cover for Your Second-hand Car

Unlike the popular belief about used cars, more people are open to the idea of owning a used car. For new drivers, it is an effective way to hone their skills while experienced drivers may prefer it for pocket-friendly price tag. Whatever is the driving experience, a used car is definitely among the vehicles to consider when deciding on its purchase. However, all isn’t done once you have bought a used car. You need to be aware of its insurance requirements too.

Many things­ like the transfer process of the motor insurance policy, retaining the no-claim bonus certificate and its transfer are some of the many things that need to be done. This article talks about all you need to know when buying an insurance cover for your used car.

First, is it compulsory for used cars to have a car insurance cover?

A simple answer to the above question is yes, it is mandatory for all cars, be it new or pre-owned to have an insurance certificate. The Motor Vehicles Act has laid it down as a compulsory requirement for all car owners. Although the Act stipulates the requirement of a third party car insurance cover as bare minimum, it can be upgraded to a comprehensive that offers a broader scope.

Now that you know it necessary to have insure used cars too with an insurance policy, here are some things to know about it:

Transfer of insurance policy or buying a new one

Transferring the insurance policy is one of the key steps to complete the buying process. Many buyers either ignore or miss on such transfer of insurance coverage, it attracts legal penalties. Hence, it is crucial to transfer the insurance policy at the time of purchase for a used car. The onus of such transfer rests equally upon the seller as well as the buyer.

When transferring an insurance plan, it is only third-party coverage that automatically gets transferred from the previous owner. Any own-damage cover that must be transferred requires an application to the insurance company.

Alternatively, you can opt to buy a fresh car insurance policy in case the earlier insurance coverage is insufficient or inadequate. The process is similar to buying a new insurance plan.

No-claim bonus: No-claim bonus is the facility where an insurance company offers concession at the time of renewal for not making any claims during a policy year. The amount of such NCB benefit ranges from 20% to all the way up to 50%. While an insurance policy is transferable, the NCB isn’t. No-claim bonus is linked to the policyholder and thus, such benefits will not be available when you buy a used car from the seller. You can visit the official website of IRDAI for further details.

Selecting the right insurance policy

Whether buying a new or used car insurance plan, make sure to select a policy that offers the required coverage, has smooth and a hassle-free claim process. This will help to stay on top of the risks that can drain your savings in the event of an accident.

Apart from the above, you must also keep in mind the insured declared value of a used car is lower than a new one. The primary reason is the depreciation that impacts and lowers the car insurance prices. * Standard T&C Apply

With these factors in consideration, it can be a breeze to buy car insurance for a used car. Also, note that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

Thanks for the support