Car Insurance Guide for Second Hand Car

Written by Sharad Bajaj

Updated On Oct 15, 20232 min read

Planning to purchase car insurance for a second hand car? Make sure to read this article before you do.

Purchasing second-hand cars in India is an extremely popular practice and has also seen a boom in recent years. It makes sense for many people since the cars are priced at almost 50% lower than new cars. Moreover, since the practice of buying second hand has become so popular there are a number of companies that can help your purchase a sound one. However, whether your car is second or first hand, it will require car insurance. But what should you know about insurance for second hand cars before you purchase one? Read this article to find out.

Is it Mandatory for Second Hand Cars to Have Car Insurance?

All cars driving on Indian roads must have at least a third-party car insurance policy according to the Indian Motor Tariff. This applies to second-hand vehicles as well. However, if you want to protect your vehicle in the event of a mishap you will require a standalone own-damage cover or a comprehensive car insurance.

What are the Benefits of Having Car Insurance for Second Hand Cars?

The following are the benefits of having your car insured:

1. Natural and Manmade Disasters: Natural disasters come unannounced and cause a lot of damage. It is not uncommon for these events to cause damage to cars especially if they are parked outside. In such situations, an own-damage or comprehensive cover will help cover the costs of repair. Similarly, in case your car is damaged during a man-made calamity or a case of vandalism the insurance will come in handy.

2. Theft or Total Damage: In the case of an older vehicle, the chances for the car being stolen is higher as is the chance of greater damage in an accident. If you have a third party and own damages cover you can rest assured that there is a layer of protection in case of a mishap.

3. Damage in Transit: Often when purchasing a second-hand car it has to be transported. It is not unusual for a car to sustain damages during this time. Having car insurance will ensure that you can be compensated for losses.

Important Things to Remember About Insurance for Second Hand Cars

The following are some important points to remember about insurance when purchasing a second hand car:

1. Lower IDV: The Insured Declared Value or IDV of a second-hand car will be lower than a new one. This is because the IDV is dependent on the depreciation rate. This means that the claim amount for such cars will be lower but so will it’s premium.

2. Theft: Newer car models come with anti-theft devices, unlike older car models. Most second hand cars become more vulnerable to theft because of this. It is important for you to purchase these devices for the car and purchase insurance that covers car theft.

3. Transfer Of Documents: After purchasing a second-hand car it is crucial to also make sure to transfer all the documents in your name. This includes car insurance documents, registration certificate and any other important papers.

What is the Procedure for Transferring Car Insurance for Second Hand Cars?

When you purchase a second-hand car you can either choose to continue with the existing policy or purchase a new one. If you choose to continue with the existing policy you must follow the below-mentioned steps to transfer the policy in your name:

Step 1: Contact the insurance company to enquire about the transfer process. Each company has a slightly different procedure.

Step 2: Provide the documents mentioned. Most will require evidence of sale, transfer of RC, Forms 29 and 30 (signed by the previous owner), copy of the existing policy and a receipt for the transfer fee.

Step 3: After the insurance company receives the documents it will pass an endorsement of the transfer. The entire process requires 7 to 14 days approximately.

Conclusion

In an overview, a second-hand car requires car insurance just as much as a new one if not more. In many cases, it is more vulnerable to theft and damage and hence having insurance can come in handy. Purchasing car insurance is now extremely simple and can be done online. With a few clicks, you can compare different car insurance companies, quotes, calculate premiums, check their network of cashless garages and even renew your car insurance. To read similar articles click here.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Written by Sharad Bajaj

View Author

Sharad is an insurance industry veteran who has managed motor insurance products for over a decade. He helped set up and scale the motor insurance vertical for a leading insurance company in his previous stint. In his spare time, Sharad likes to read and be in tune with nature.