Second Hand Car Insurance

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About Second Hand Car Insurance

Car is among the most valuable purchases you would ever make. Regardless of whether it is a brand new or a used car, you want to make sure that you this prized possession is well-protected. A motor insurance policy is among the most economical way to safeguard your car against any damages. A third party liability insurance cover is mandatory for all motor vehicles plying on Indian roads, but it is recommended that you nevertheless get a comprehensive car insurance for your car for all-round financial protection. Remember that a third-party liability only insurance will not pay for any repairs that your car may need after an accident.

What is second hand car insurance

A second hand car insurance is an agreement between an insurance provider and anyone with an insurable interest in a second hand car. The insurance policy itself does not change based on the age of the car. That said, some of the add-on covers may not be available for a car older than three or five years. For example, invoice price cover is only valid for cars less than three years old.

 

In consideration of a premium paid, the insurer promises to pay for any damage sustained by your car during the policy period. Any claims made by a third-party who has sustained damages due to an accident involving your car are also covered. The insurer would also provide legal support to contest any claims and file claims against third-party who maybe at fault in an accident where your car sustained damages.

Why to Insure your second hand vehicle

According to the Motor Vehicles Act, 1988, it is an offense to drive a car without a valid third-party liability car insurance cover. This kind of insurance cover only pays for damages sustained by a third party involved in an accident with you, if you are found to be at fault or if fault cannot be established. If you would like the insurer to pay for any damages that your car may sustain in an accident, you should invest in a comprehensive car insurance instead.

 

You should insure your second hand vehicle as it is exposed to the following risks:

  1. Third-party risk: If any damage is caused to a third-party in an accident involving your car, you will have to bear the cost of the repairs and also pay for any medical expenses needed by a third-party person injured. Your liability will be much higher in case of death/disability of the third-party. A car insurance would cover against these risks
  2. Theft: Car theft and hijacking is a notorious crime that can lead to a total loss of your car. By setting the right insured declared value in your comprehensive car insurance policy, you would be able to arrange the finances to buy a replacement car.
  3. Natural calamities: Natural disasters like floods, earthquake, rockslides and landslides can happen anytime. Your car may get damages during such a calamity. An insurance would protect you from financial hit arising from such an event.
  4. Man-made calamities: Your car may also be damaged due to a man-made calamity like riot, vandalism or fire. A comprehensive car insurance will provide you financial protection in such a scenario.

Benefits of buying insurance for your second hand car

If you are still not convinced, here are a few more benefits of buying a comprehensive car insurance policy for your second had car:

 

Protection against vandalism: Your car would usually be parked out on the road. A random passer-by may decide to scratch it out of some malice or there may be a protest on the road and your car may get damaged by the protestors. A comprehensive car insurance will pay for repairs in such scenarios as well.

 

Cover against collisions with stray animals: If you are in a collision with a third-party and they are at-fault, then their car insurance will pay for any damages that your car sustains. But what if you collide with an animal on the road? Your car would still sustain damages and dents. A comprehensive cover would pay for these damages as well.

 

Cover against car fires: Car fires are devastating and can even lead to your car being unrecoverable. With a comprehensive car insurance policy, you can at least be assured that the financial hit from such an incident would be contained.

 

You also get a cover against theft, third-party liabilities, and any damage sustained by the vehicle due to a natural or manmade calamity. Some of these scenarios may seem a little far-fetched, but they are within the realm of possibilities. While you cannot predict when an accident may happen, it is best to be prepared for all eventualities when a large investment in involved.

How Second Hand Car Insurance Premium is Calculated

The process of calculating the car insurance premium remains the same regardless of whether the car is new or used. The IDV of the car will be based on the age of the vehicle from the first ownership and not just based on when you get to own it. If the car is older than five years, the IDV is agreed upon based on mutual consent between the two parties.

 

The premium of your second hand car insurance policy depends on the following factors:

  1. Insured Declared Value of the car
  2. Cubic capacity of the engine
  3. Age of the  car
  4. Geographical location
  5. No claim bonus
  6. Any other discounts
  7. Whether the car is used for commercial or personal purposes

You can use the car insurance premium calculator to get a good estimate of the premium to be paid.

 

 

 

What are the deductions under second hand car insurance

Second hand car insurance is subject to same compulsory deductible as a new car insurance policy. The value is set by IRDAI based on the cubic capacity of your car. At present, it is set at ₹1,000 for cars with a cubic capacity up to 1500cc, and at Rs 2,000 for greater cubic capacity. You could also opt for voluntary deductible to reduce the premium charged by your car insurance company.

 

Further, depreciation costs on car parts and accessories will also have to be borne by you. These are calculated according to the below guidelines provided by IRDAI:

  • 50% Depreciation on Nylon, Plastic Parts, Rubber Tyres and Tubes, Air Bags and Batteries
  • For Car paint, 50% Depreciation on the Material Cost of the paint
  • 30% Depreciation for Fibreglass
  • For other parts including wooden parts, depreciation depends upon the age of the car as per the table below

Vehicle Age

% Depreciation

Less than 6 months

NIL

6 months – 1 year

5%

1-2 years

10%

2-3 years

15%

3-4 years

25%

4-5 years

35%

5-10 years

40%

Greater than 10 years

50%

 

Things to keep in mind while insuring a Second Hand Car Insurance

  1. Get the insurance policy transferred from the original owner. Along with the ownership of the car, the insurance policy that the previous owner had can be updated to reflect you as the new owner. Typically, you wouldn’t be able to change the type of car insurance mid-term but you can get add-on covers for your particular requirements, if needed.
  2. You can choose to get a new insurance cover as well. In this case, make sure that the IDV is calculated accurately. The lower IDV would mean that the car insurance premium that you have to pay would be lower as well.
  3. Verify the claim history provided by the previous owner. All you have to do is call up the insurer and provide the insurance number. They would be willing to share the claim history with you.

Documents required to purchase second hand car insurance

The following documents are to be presented when purchasing a second hand car insurance policy:

  1. A proof of identity, which could be one among:
    1. Passport
    2. Driving license
    3. Aadhar
    4. PAN card
    5. Government issued photo ID
  2. A proof of address, which could be one among:
    1. Passport
    2. Driving license
    3. Bank or post office passbook
    4. Government issued address proof
  3. A recent passport size photograph
  4. Driving license
  5. Registration certificate of the vehicle
  6. The original purchase invoice of the car

Why Bharti AXA for Second Hand Car Insurance

When you buy an insurance cover from Bharti AXA General Insurance, you join a family of over a millions satisfied customers. You can reach out to our team any time of the day, from anywhere in the country for assistance with your car insurance policy. You just make a call to our numbers and we would guide you through the simplified claims process to ensure that the settlement happens as soon as possible.

 

You also get access to our vast network of cashless garages, allowing you to get your car repaired without having to shell even a single rupee from your pocket. The claims are settled in a completely hassle-free manner and the payment made directly to the garage. Our strong online presence allows you to not just buy and renew policies online, but you can also file claims completely online making the process much simpler than ever before.

 

Bharti AXA General Insurance also offers a large bouquet of add-on covers through which you can customize your coverage to your specific requirements.

 

FAQ

What things needs to consider before buying second hand car insurance?

Consider the market value of your second hand car as this will determine what the IDV for your car should be. If the IDV varies a lot from the market value, request your insurer to adjust it accordingly. Further, ensure that the RC book reflect you as the owner of the car.

How to claim second hand car insurance?

The claim process remains the same regardless of whether the car is brand new or pre-owned. The steps involved are:

  1. Initiate the claim process by calling the claim intimation number provided by your insurer
  2. File an FIR, if applicable, and get a copy of the same
  3. Take the damaged vehicle to a car garage for the repair
  4. The insurer would assign a surveyor to assess the damage
  5. Make sure to keep all original invoices in case of a reimbursement claim
  6. The insurer would confirm the damage and initiate the reimbursement process/ inform the garage to carry out the cashless services.

How to transfer second hand car insurance?

  1. Submit a duly filed proposal form with evidence of sale including transfer of RC and Forms 29 and 30. A copy of the existing policy should also be attached to the form
  2. Submit the new RC as soon as it is issued by the RTO
  3. After verifying the documents, the insurance would be transferred to the new owner
  4. If a claim is made while the transfer is in process, it will be processed once the transfer is complete.

How to renew second hand car insurance?

The renewal process remains the same regardless of the insured car being new or preowned. All you have to do is to visit the portal of your insurer and fill in the requisite form. You can also add or remove any add-on covers at this point in time. A quote will be generated for you and on payment of the premium charges, the policy would be emailed to your id.

What will be the NCB for second hand car insurance?

The NCB is based in the owner-driver’s record and not on the car. If you have any NCB built up at the time of purchase, you can use the same when purchasing your second hand car insurance.

Policy Name:

IRDAN139RP0032V01200809

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UIN:

UIN : Smart Drive Private Car Insurance

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