Used Car Insurance

Used Car Insurance

Owning a car is one of the biggest achievements of a person’s life. Everybody dreams of owning the car of their dreams and when it finally comes true, it is a big deal for all of us. While most people prefer to buy a brand-new car, a large section of people go for a second hand car. As per a report by IndianBlueBook, 4 million second hand cars were sold in India in the year 2018-19 as compared to the sale of 3.6 million new cars. The primary reason behind more people choosing to buy second hand cars is that used cars are available at a lower price as compared to a new car of the same model.

Whether you have purchased a new car or second hand car, it is important to keep it protected from all kinds of dangers and risks. The best way to do so is to get your used car insured under second hand car insurance, just like you buy car insurance for your newly-purchased car. You may know all about car insurance for a new car, so let’s discuss the used car insurance for second hand cars.

What is Used Car Insurance?

Used car insurance is a type of car insurance policy meant to protect second hand cars. It safeguards a used car from any unpredictable dangers and adversities that may lead to major loss or damages. It provides the same level of coverage that a new car gets under a car insurance policy. Thus, a second hand insurance policy covers the used car from both third party liabilities and own damage risks.

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Why Should You Get a Second Hand Car Insured?

Buying a car insurance policy is important for all car owners, irrespective of whether the car is new or second hand. If you want to know why you need to get your second hand car insured under a used car insurance plan, take a look at the reasons below:

  • from All Risks The basic purpose of a comprehensive car insurance policy is to keep it safe from all kinds of adversities and risks. 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 Motor Vehicle law of India, 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.

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How to Transfer Car Ownership and Insurance?

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 the existing car insurance for the used car transferred to your name within two weeks, just like the registration certificate of the car.

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 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 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)

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 checklist 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 used car insurance 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 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 the 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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