What Is a Second-Hand Car Insurance Policy and Why Do You Need One?

What is car insurance?

A car is definitely among the most priced and valuable purchases you would make in your life. Whether it is a brand-new or used car, you want to ensure the vehicle is well-protected. This is where vehicle insurance comes in handy. Getting car insurance is the most economical way to safeguard your vehicle against damage or loss.

Third-party liability insurance is compulsory for all vehicles driven on the Indian roads. However, it is recommended that you get comprehensive insurance coverage for all-around financial protection for yourself and the third party.

Looking to buy a used car?

6L+ Vehicles ✓ Trusted Sellers ✓ 100% Finance

Give us a missed call07941055729

What is second-hand car insurance?

A second-hand car insurance is an insurance taken for a pre-owned car. The insurance policy in itself does not alter based on the age of the vehicle. However, some add-on coverages may not be available for cars older than three or five years.

Considering the premium paid, the insurance provider promises to pay for any damage sustained by your vehicle during the policy's tenure. Any claims made by a third party who has suffered damages from an accident because of your car will also be covered. The insurance provider would also offer legal support to contest any claims and file claims against third parties who may be at fault in an accident where your car sustained damages.

Why should you insure your second-hand vehicle?

Driving a car without a valid third-party liability insurance cover, according to the Motor Vehicles Act, 1988, is an offence. Therefore, all vehicles, whether new or old, must have valid insurance coverage. The third-party insurance policy only provides for damages sustained by a third party involved in an accident with your vehicle if you are discovered to be at fault or if the fault cannot be established. If you want the insurance provider to pay for any damages your car may have sustained in an accident, you should invest in comprehensive car insurance instead.

Your second-hand vehicle is typically exposed to the following risks and must be insured.

Third-party risk:

This is one of the most common reasons you must get valid insurance coverage for your car. If a third party is injured or is at a loss due to an accident involving your vehicle, you are entitled to pay the compensation amount. The insurance provider will pay this amount.

Theft:

If you lose your car in theft, you can arrange the finances to buy a replacement car by setting the right insured declared value in your comprehensive car insurance policy.

Natural calamities:

You are at risk of damaging your car or losing your car due to a natural disaster like earthquakes, floods, landslides, and so on. An insurance policy will protect you financially in such situations.

Man-made calamities:

You can claim insurance if damage or loss happens to your car in artificial calamities like riots and vandalism.

What are the things to remember while insuring with second-hand car insurance?

One of the foremost things you must consider is transferring the insured policy from the original owner. Along with the car's ownership transfer, the previous owner's insurance policy can be updated to reflect you as the new owner. Technically, you cannot alter the kind of insurance mid-term, but you can get add-on coverages for your requirements.

You can decide to get a new insurance policy, too. It would help if you made sure that the IDV is calculated right. The lower IDV would mean the car insurance premium you must pay would be less.

Check the claim history given by the previous owner. All you have to do is contact the insurance provider and provide the insurance number. They will share the claim history with you.

Wrapping Up

It would help if you got your vehicle insured, regardless of whether it is new or old. Getting second-hand insurance is financially viable if you plan to buy a pre-owned vehicle. Besides driving a car without valid insurance being illegal in India, having one provides peace of mind as it offers financial backup when required.