Can I Buy Car Insurance before Buying a Car?
Published On Jul 26, 2023, Updated On Aug 23, 2023
Can I Buy Car Insurance before Buying a Car?
Car insurance is not just a legal requirement; it's an essential safeguard for your financial well-being. While third-party liability insurance is mandated by law, carrying a comprehensive coverage policy can protect you from significant financial burdens following an accident. The requirement to secure coverage begins as soon as you start driving the vehicle. However, one common query is whether you can purchase car insurance prior to buying a car. The straightforward answer is no, primarily because essential details about the vehicle and its purchase are necessary to obtain a policy. This article aims to guide you through the intricacies of when and how to secure car insurance for your new car. Read on to learn more.
When Can You Buy Car Insurance?
In India, possessing at least third-party car insurance is a legal requirement before you can drive your car, even if it's just from the dealership to your home. However, to secure this insurance, you'll need a purchase receipt, effectively implying that you must complete the car purchase before buying the insurance.
There's a caveat: the insurance can be obtained with just a purchase receipt only within three months of the car's purchase. Beyond this period, a registration certificate becomes necessary, along with the Aadhar card, which is needed in both scenarios.
Moreover, renewing your car insurance companies may present an opportunity to reassess your coverage. You have the option to either stick with your current plan or switch to a new one. While renewals are typically swift and straightforward, purchasing a new motor insurance policy might require additional documentation, including the RC (Registration Certificate).
How to Buy Car Insurance?
Follow the steps below to buy car insurance:
- You must have third-party insurance, but a state can have additional requirements. So the first step in buying insurance is to understand the requirements imposed by the state for buying car insurance.
- If you have an auto loan, you must check with the lender to understand their requirements. Some lenders might need you to get comprehensive insurance, while others may only need third-party insurance.
- Your requirements also affect what type of car insurance you need. For example, if your car is expensive, you might want comprehensive car insurance. Or you might need insurance that protects you in case of a flood if you live in a flood-prone area.
- The next step is to decide how much you can pay yourself at the time of an accident. That means you must decide on the voluntary deductible; the higher it is, the lower the premium will be. However, ensure that you don't choose a deductible that is out of your budget.
- Research the best quotes for your car insurance renewal online. You might need to provide your contact details, but then you can directly get information from the agent.
- While researching for quotes, you will come up with several insurers. Check the reviews of each insurer online; there are dedicated websites for reviewing insurers and insurance plans.
In conclusion, you can not buy car insurance before purchasing a car. But you need car insurance for taking the car home, as driving a car without third-party insurance is illegal. Thus, you can buy use the purchase receipt to buy car insurance. To find the best insurance, understand what you need, then compare quotes from various insurers online. Finally, go to the chosen insurer's website, enter the details, and finalise the insurance.
- What documents do you need to purchase car insurance?
You require identity proof, address proof, passport-size photograph, driving license, and RC (or purchase receipt in case of a new car). To prove identity and address, you can use a Passport, driving license, or Government ID. Adhar or PAN car can also be identity proof. For address proof, you can also use a bank or post office passbook.
- Does car insurance depend on how much you drive?
Traditional car insurances depend on the make, model, age, and geography. However, insurers now have a pay-as-drive model that depends on your driving. Your insurance premium depends on the distance you drive in a year. This insurance model is based on the fact that you have less chance of getting into an accident if you drive less.
- What are the different types of car insurance?
There are the following types of car insurance:
- Third-party: You only cover the damage and legal fees incurred when you hit a third party; this is mandatory.
- Own-damage car insurance: This insurance covers the sum required to repair the damages to your car.
- Comprehensive Insurance: This insurance covers several situations, including fire and natural disasters. Both third- and first-party insurance are included in comprehensive insurance. However, comprehensive insurance will be more expensive.
- Zero-Depreciation: The insurance claim amount depends on your car's current value. However, this value depreciates as the car ages. A zero-depreciation or bumper-to-bumper insurance allows you to get a claim amount according to the value of your car at the time of the purchase.
- What are the reasons for buying comprehensive insurance?
Comprehensive insurance usually gets you the following benefits, but the details may vary:
- You will get an accident cover that will help treat the owner's injuries.
- You can get a claim amount for repairing your car.
- You get a claim amount in case your car gets stolen.
- What are add-ons in car insurance?
Insurers may provide you with several add-on choices that get you additional benefits. For example,
- Roadside assistance: You can get help for towing or other roadside repair.
- Engine Protect Cover: This add-on will help you replace your damaged engine.
- Consumable Protect Cover: You get coverages on various consumables, including nuts, bolts, screws, oils, etc.
- Is it more beneficial to buy car insurance online?
Buying a car insurance online would be great as:
- You can get quotes almost instantly; no more waiting while the agent calculates.
- Online purchase of car insurance has less hassle.
- There is no paperwork involved while purchasing car insurance online; you only have to answer a few questions.