Should you opt for a second-hand car insurance policy
Should you opt for a second-hand car insurance policy 30th January 2022
Buying a second-hand car is a quick and easy way to get into the world of driving. Second-hand cars are a boon for families that dream of having their own car but find it difficult due to financial reasons. Research states that of the total car transactions made in India, around 55% are used cars purchases.
However, buying a used car doesn't mean you won't need insurance. Without insurance, you may find yourself paying even more for accidental damages and other repair or maintenance costs. You can save considerably on garage costs by investing in the right car insurance policy and capitalise on its benefits to gain healthy returns on your investment.
What is second-hand car insurance?
When you're buying a used car, the insurance history is essential — it shows you how much the owners took care of their vehicle and whether or not they were honest with their insurance claims.
After buying a used car, immediately call your insurance company. Registration is the first step in purchasing a vehicle. After you are registered, you have 14 days to transfer the insurance policy into your name.
Why is it essential to insure your second-hand car?
In India, car insurance is mandatory by law. However, third-party policies (also called liability car insurance) aren't sufficient to cover all damages. On the other hand, comprehensive policies provide more in-depth coverage.
As for your car insurance, choose a policy that includes comprehensive coverage. It will protect you against losses due to damages caused by human or natural calamities or the loss of your vehicle itself. Suppose a third party's death or injury occurs during an accident. In that case, their family will not be able to claim from you directly if you have paid the policy premium timely.
Pros of getting your second-hand car insured – The insurance policies cover you against the following problems:
• Natural disasters – Comprehensive car insurance covers your losses against damages caused by natural disasters like storms, floods, earthquakes, and other events beyond human control.
• Car accidents – Insurance protects you against the financial risks of injury or death due to car accidents, as well as damage or destruction of your vehicle.
• Robbery – As long as you have an accurate insured declared value, comprehensive car insurance will cover theft, vandalism, and other accidents resulting in total loss.
• Man-made catastrophes – You never know what could happen, but if someone else's actions cause your car to catch fire, you'll be covered. Likewise, artificial catastrophes such as vandalism, fire, self-ignition, and acts of terrorism will be covered under this policy.
Ignorance is never bliss when it comes to the safety of your car. In many cases, owners do not qualify for insurance claims due to a lack of awareness. Individuals must transfer the insurance policy to their name if buying or selling a second-hand car. The previous owner should also follow the procedure to ensure that legal problems don't arise in the future.
While owning an uninsured vehicle comes with several risks, one should also keep in mind that Indian law mandates that all vehicles must be covered under proper insurance.
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Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.