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Is it Advisable to Purchase a Second Hand Car Insurance Policy?

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All cars are mandatorily required to have a Third Party Liability Car Insurance policy in India. As per Section 157 of the Motor Vehicles Act, 1988, the owner of the car is required to transfer the car insurance policy to the new owner within 14 days of making the sale. If the owner has a Comprehensive Car Insurance policy, then the buyer has an option of continuing with the same or opting for the mandatory Third-Party liability policy and taking a separate own-damage car insurance policy.

Car Insurance and Second Hand Cars

Many people equate car insurance with new cars as they think that new vehicles need protection from damages due to accidents and collisions. There are different types of car insurance policies like the mandatory Third-Party Liability policy, Comprehensive Car Insurance policy, and standalone Own Damage Car Insurance policy.

Buying a policy that offers coverage from damage to a third party is not an option, even if you are buying a used car. A comprehensive insurance policy offers protection to you and your vehicle along with the third party cover. Car owners choose these plans if they want to get coverage for their vehicles too. Own damage policies offer coverage only to you and your vehicle and do not include third-party liability.

When you buy a second-hand car, you have the option of continuing the second-hand car insurance policy purchased by the existing owner by transferring it to your name or getting a new one. It is important to remember that driving a car (new or used) without a valid insurance policy for a second-hand car is illegal in India. Hence, you will need to mandatorily have a Third Party Liability cover for your car. You can choose if you want to include coverage for your vehicle too and opt for a comprehensive plan, but that is optional.

What Happens if You Don’t Purchase Car Insurance for Your Second-Hand Car?

Many people purchasing used cars tend to put off transferring the car insurance policy to their names. If the insurance policy is not in the name of the new owner of the car, the insurer can reject claims for damage to a third party or own damage. The responsibility lies with the new owner as well as the old owner of the car. Hence, when you purchase a second-hand car, make sure that you get the insurance policy transferred without fail.

Process for Transferring a Car Insurance Policy

While the process of transferring the policy might vary depending on the insurer, here is a generic process for your ready perusal:

  • Provide the evidence of purchase like the RC Transfer Receipt
  • Fill out Forms 29 and 30 duly signed by the previous owner
  • Submit a copy of the previous car insurance policy
  • Pay the transfer fee

While the insurer might start the transfer process, you are required to submit a copy of the new Registration Certificate once you receive it from the RTO to ensure that your claims are processed.

You can also purchase a new insurance policy. Most insurers offer online platforms to help car owners choose the best plan for their vehicles. Visit their websites and use the free car insurance premium calculator offered by many insurers to determine the quote for car insurance and the four-wheeler insurance price for the coverage desired by you.

Is It Advisable to Purchase a Comprehensive Car Insurance Policy for a Second-Hand Car?

A comprehensive car insurance policy offers coverage to you, your car, and third-party liability. You can also choose add-ons to customise the policy to suit your specific requirements.

When you are driving, there is always a possibility of a collision, mishap, or accident. During such times, a Comprehensive policy can ensure that your finances are not strained in managing the situation. First, however, make sure that you assess the cost of repairs of the used car and buy a plan that is cost-efficient.

Summing Up

Remember, a car insurance policy is designed to offer financial coverage to you during incidents that result in damage to a third party or your car. These policies usually offer a range of services that make the journey of owning a car, hassle-free. While buying a Third Party Liability policy is mandatory, you can consider opting for a Comprehensive plan based on your needs.

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