How to Insure Your 2nd Hand Car

How to Insure Your 2nd Hand Car

Refurbished second-hand cars are becoming more popular nowadays. Second-hand cars are generally an affordable option when compared to a brand new car. Purchasing a second-hand car involves a great deal of paperwork, including the transferring of vehicle and the insurance policy in your name.

Second-hand car insurance is just as vital as insurance for a new car. What is second-hand car insurance? Why is it so crucial to buy a second-hand car insurance policy? Let's find out in this article.

What is Second-Hand Car Insurance?

Second-hand car insurance works in the same way as a typical car insurance policy. An insurance policy that covers a used car is second-hand car insurance.

The Insurance Policy is typically a legal contract between you and the insurer. The insurer provides you the financial assistance in case of any damage or accident in exchange for the premium you pay to keep the policy active. It protects you against financial losses in the event of damage or theft of your vehicle.

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Why is It Important to Buy Second-Hand Car Insurance?

  • Legal Requirement
    In India, it is mandatory to insure both old and new cars. Driving a car without a valid insurance policy is a crime and may result in legal consequences.

  • Covers Third-Party Liabilities
    As per the government norms, having third-party liability insurance is mandatory. A third-party liability insurance policy safeguards you against legal liabilities arising from the loss or damage you cause to another person or their property involved in the incident.

  • Safeguards Your Car Against Any Sort Of Damage
    In order to protect your vehicle against theft, accidental damage, or total loss, it is crucial to have your car insured. Typically a comprehensive policy or a standalone own damage policy will do the job for you.

    For example, your car is more likely to suffer damage if you live in an accident or flood-prone area. It is therefore imperative to insure your vehicle with comprehensive policy motor insurance policy to cover any damages.

Process to Insure Your Second-Hand Car?

These are the steps to follow to purchase/renew the insurance policy for your second-hand car:

  • As soon as you purchase a second-hand car, you must transfer ownership of the vehicle on your name
  • In order to transfer ownership of the car and insurance, you need the following documents:
    • Original Registration Certificate (RC)
    • Insurance Policy certificate
    • Form 29 and 30 that bear the signature of the previous owner
    • Road tax documents from RTO
    • Car warranty document, if any.
    • The new copy of the registration certificate
    • Pollution certificate
    • Copy of original invoice of the car
    • No Objection Certificate from the previous policyholder
    • No Claims Bonus  difference amount, if any.
  • As soon as the car has been transferred to your name, you can renew your insurance policy with the insurer.
  • In case your second-hand car doesn't come with an insurance policy, you can purchase an insurance policy from your preferred insurer. you will be required to follow the procedure suggested by the insurer, and your vehicle may undergo an inspection before the policy is approved.
  • In case you are looking for a new policy, then a comprehensive policy is ideal because it provides you maximum coverage.
  • You can buy insurance online or offline, as per your convenience. make sure you purchase the policy from a genuine insurer.

What are The Factors That Affect The Premium of A Second-Hand Car?

While determining the premium, several aspects are taken into consideration. They are:

  • Make And Model Of The Car
    Depending upon a car's make and model, the premium may vary. A luxurious car may have a higher premium. For example, the premium of a BMW will be higher than that of a Hyundai.

  • Current Market Value
    As the car gets old, the car's market value decreases. Second-hand cars are typically older and hence shall have a higher depreciation value. The premium shall be calculated accordingly.

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What are the Types of Car Insurance Policies?

There are different types of insurance policies. Each of them has its own purpose. You can opt for the one that best suits your needs.

  • Third-Party Liability Only Cover
    As per IRDAI, third-party insurance is mandatory for all registered vehicles in India. third-party liability insurance covers you against legal liabilities that occur due to the loss/damage caused by you to another person's body or their property.

  • Collision Damage Or Own Damage (OD) Cover
    It is a policy specifically designed to cover your own car's damages and losses. It provides coverage for losses, including accidental damages, damages due to transit, theft, natural calamities, and human-made disasters.

  • Comprehensive Car Insurance
    A comprehensive motor insurance policy offers financial protection against any loss/ damage caused to your vehicle, as well as to a third-party individual or property. A comprehensive policy allows you to opt for several add-ons that provide extra protection to your vehicle. You can purchase these add-ons by paying an additional premium.

Now that you are aware about the importance of insuring your second-hand car, make sure you follow the necessary steps to get your vehicle insured. Ensure that you the choose the right insurance policy that suits your needs and requirements.


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