Essential Tips For Buying Insurance For Used Car


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A used car insurance plan is an insurance plan for a four-wheeler that is not new. But why should you buy car insurance for a used car?

The main reasons to get a used car insured include compliance with motor laws in India, coverage for your four-wheeler against accidents and other damages, personal accident insurance coverage and protection against third-party liabilities.

Continue reading to get some essential tips for buying car insurance for used cars.

 Tips for When You Buy Car Insurance Policy for a Used Car

 Your Car Insurance Requirements

To purchase the most optimal used car insurance policy for yourself, you must first understand and determine your car insurance requirements.

This includes the coverage you require for your used car, the type of policy you want to purchase, and the premium you are willing to pay. You can purchase an own-damage, a third-party or a comprehensive car insurance policy from any IRDAI-approved provider.

 The Claim Settlement Ratio of the Chosen Insurance Provider

Reviewing the claim settlement ratio of the chosen insurer is one of the key factors to consider when purchasing a used car insurance policy. An insurance provider’s claim settlement ratio represents the percentage of settled claims during a particular financial year.

The higher the ratio, the more reliable the insurance provider. For example, Tata AIG’s CSR for FY 2022 – 2023 was 99% on their motor insurance claims.

 The Coverage Provided by the Car Insurance Policy

You must assess and compare four-wheeler insurance policies online and weigh them against your car insurance requirements. If you stumble upon a policy that aligns with the coverage you want and the insurance premium you are willing to pay, you can shortlist the policy.

 The Premium of The Chosen Policy

The premium of the four-wheeler insurance policy is the amount you pay for the insurance coverage you get for your vehicle. It is an essential differentiator in car insurance policies, and it depends on the declared value of your car’s insured, geographical location, make, and model.

You can compare used car insurance costs and shortlist policies whose premium aligns with your car insurance budget. You can also utilise a used car insurance calculator to calculate the premium.

 The Garage Network of the Selected Insurance Provider

If the car insurance provider includes a wide range of garage networks, you get a high degree of flexibility in availing of cashless insurance. Therefore, you must check out their garage network before selecting an insurance company as your car insurance partner. Go for insurers that have a Pan-India network or ones that offer several garages near your location.

 The Age of Your Four-Wheeler and the Accumulated Depreciation

You must review the depreciation accumulated on the components of the used car due to usage and age. As a car ages, its insured declared value decreases, and so does the car insurance premium.

 Process to Transfer Car Ownership and Insurance

When you purchase a used car, you must legally transfer ownership to you. You must also transfer the existing car insurance policy to you, provided the policy is still valid.

Below is the process for the transfer of ownership of your used car-

  • Go to the official website of Parivahan.
  • Select “Vehicle-Related Services”.
  • Select the applicable regional transport office.
  • Submit all the necessary documents and the fee to complete the ownership transfer process.

Once you are issued the registration certificate for your used car in your name, you can proceed to fill out and submit a form for insurance policy transfer with the relevant four-wheeler insurance provider. The insurance provider will complete the above-mentioned process upon receiving all the necessary documents and fees.

If the insurance policy on your used car lapses before you renew it, you must purchase a new policy as soon as possible.

 Documents Required to Transfer a Used Car Insurance Policy

  • A copy of the existing car insurance policy.
  • New registration certificate of the used car.
  • No Objection Certificate (NOC) from the person who previously owned the used car.
  • Proof of legal sale of the used vehicle.
  • The application form that was submitted to the car insurance company.
  • Proof of legal transfer of the registration certificate.
  • Proof of address and identity of the new owner of the used car.

 To Wrap It Up

When you buy a used car insurance policy, check aspects such as choosing the right insurance provider, choosing the right type of insurance policy, reviewing the policy coverage, checking the insured declared value of your car, checking the policy premium, checking the garage network and comparing different policies.

Additionally, ensure that the insurance provider you choose is a reputed one like Tata AIG. They should be reliable, offer 24/7 support and offer extensive coverage at an affordable price.