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One of the most crucial steps after bringing a new car home is purchasing car insurance. It is a legal requirement and a financial safety net that protects you from unforeseen expenses and liabilities resulting from certain mishaps. Not just for new cars, car insurance is equally essential for used or second-hand vehicles.
At Reliance General Insurance, we offer excellent plans for your new and old vehicles alike. With comprehensive coverage, 100%* claims settlement ratio (FY 2023-24) and 10,000+ network garages, we ensure you are well-protected and experience a stress-free driving experience.
On this page, we will discuss the significance of used car insurance, its benefits and steps to buy it.
Used car insurance or old car insurance is designed specifically for pre-owned or second-hand cars. You can purchase this policy for old (classic) cars or any other pre-owned cars.
Car insurance for used cars offers coverage for expenses incurred due to unprecedented events such as accidents, natural calamities, theft, man-made disasters and even third-party liabilities.
Purchasing car insurance for used cars is not simply an option. It is a mandatory requirement for every motor vehicle owner in India. As per the Motor Vehicles Act, every vehicle owner must have a suitable insurance policy.
Failure to do so can lead to traffic fines and penalties. So, whether you own a new or second-hand car, make sure to purchase suitable insurance before hitting the public roads.
Car insurance for second-hand cars offers coverage for loss and damages incurred due to natural calamities like floods, earthquakes, cyclones and so on. This helps you pay for the necessary repairs and replacement of the vehicle without any financial struggle.
Compared to new cars, second-hand cars are more prone to accidents and hence, third-party liabilities. Therefore, it is essential to purchase car insurance for used cars.
The right policy allows you to compensate third parties for their losses and recover legal expenses, if incurred, due to such an event.
Regardless of whether you use a new or second-hand car, there is always a risk of theft, especially if you frequently leave your vehicle unattended or use public parking spaces.
By purchasing insurance for your used car, you can claim up to the total market value of your car if it gets stolen during the policy year.
Having a suitable policy for your used car will provide you with the necessary financial protection to deal with the unexpected expenses arising from mishaps. With comprehensive coverage, you get protection against a wide range of risks, including accidents, theft, natural disasters, collisions, etc.
This coverage ensures you are not burdened with significant financial loss and get your vehicle back on the roads with minimal stress.
Comprehensive car insurance for used cars offers coverage for personal accidents. This helps you deal with the medical expenses resulting from accidental injuries.
Besides, a used car insurance plan from Reliance General Insurance also offers accidental death or permanent total disability benefits to the owner-driver of an insured vehicle.
By purchasing your used car insurance from Reliance General Insurance, you can avail of cashless repairs at more than 10,000 network garages spread all across the country.
From high-quality repairs to free transportation of your car to and from the garage, you can avail of professional services in a nearly cashless manner.
Having comprehensive car insurance can provide you with better resale value for a vehicle. It proves that the car has been well-protected and maintained which can lead to higher selling price.
Also Read: Understanding Cost of Comprehensive Car Insurance
In most cases, second-hand cars come with an insurance policy that still has time left for expiry. You must ensure to transfer the policy as well as registration certificate to your name, ideally, within two weeks.
Below are the steps to transfer ownership of car insurance for a used car in your name:
Here’s how to buy insurance for a used car online from Reliance General Insurance:
Here is how you can renew comprehensive car insurance for second-hand cars:
Similar to new car insurance, car insurance for used cars is also subject to mandatory deductibles. As per IRDAI regulations, a compulsory deductible of ₹1,000 for vehicles up to 1500 cc and ₹2,000 for vehicles with over 1500 cc is applicable.
You must pay this amount at the time of settling the claim.
In addition to the compulsory deductibles, you can also opt for voluntary deductibles to lower your insurance premium cost. These costs can be viewed using a used car insurance calculator.
The Insured Declared Value of your car is an important factor that impacts your coverage amount and premium. Hence, make sure to verify the IDV of your second-hand car before searching for a suitable policy.
Do not finalise car insurance for second-hand cars before checking their insurance history. Check the number of claims previously made and ensure there are no unsettled or pending claims.
If you are purchasing second-hand car insurance and your existing policy is eligible for a no-claims bonus, make sure to transfer them to your new policy. These rewards can help you reduce your premium cost.
There are several categories of car insurance, each tailored to the unique requirements of car owners.
Some of the best car insurance for used cars offered by Reliance General Insurance are comprehensive car insurance, standalone-own damage car insurance, and more. Make sure to choose the right coverage based on your requirements.
Once you have shortlisted the best used car insurance plans, go through their policy wordings to understand the offerings better. This helps ensure you are aware of the coverage limits, exclusion and other important policy conditions.
Add-ons are the optional features you can purchase with your existing car insurance policy to enhance its coverage. Some of the most popular car insurance add-ons offered by Reliance General Insurance include, Nil Depreciation Cover, Engine Protection Cover, Return to Invoice Cover and so on.
Used car insurance premium rates are highly influenced by the make and model of your car. Typically, car insurance premiums for high-end luxury cars are higher than those for regular-budget cars.
This is due to the difference in the cost of repair and replacement of different categories of cars.
Insured declared value (IDV) or the current market value of your used car also plays a huge role in the premium calculation. Although higher IDV leads to higher car insurance premiums, it also ensures better compensation in case of total loss of your insured vehicle.
Conversely, a lower IDV will result in low premium rates but also reduce your total vehicle loss compensation.
The present condition of your vehicle also plays a key role in determining your classic car’s insurance rates. Generally, well-maintained vehicles are cheaper to insure. Moreover, the mileage of the car also impacts the premium rates.
A higher mileage can lead to higher premiums as the car is vulnerable to higher risk wear and tear due to extensive usage.
No claims bonus can significantly reduce your used car insurance premium rates. If no claims have been made during the last year, you can avail of a no-claims bonus discount to lower your premiums for the current year.
Car insurance premium rates are different for different types of plans. Generally, third-party car insurance is cheaper due to limited coverage and benefits.
However, the best classic car insurance or preowned car insurance is the comprehensive policy which has slightly higher premiums rates but with extensive coverage.
Also Read: Understanding Cost of Comprehensive Car Insurance
Classic car insurance is a type of insurance designed for old and vintage cars. Cars certified by VCCCI (Vintage and Classic Car Club of India) are eligible for standard car insurance. It works the same way as a new car insurance.
The best classic car insurance provides financial coverage for the insured vehicle against unforeseen damages and losses resulting from natural calamities, man-made disasters, theft, personal accidents, third-party liabilities and other such events.
The only difference is, that the premium calculation of such cars is done after considering their present market value as well as the cost of repair and replacement. So your classic car insurance cost may vary depending on these factors.
Hence, it is essential to do a thorough classic car insurance comparison before purchasing.
You can purchase a standard third-party or comprehensive car insurance policy for your VCCCI-certified car. While third-party car insurance is mandatory by law, it does not offer coverage for your personal loss or damage.
Hence, is recommended for classic and vintage cars for all-round protection. You can easily buy classic car insurance from Reliance General Insurance online.
The purchase process is the same as buying a new policy (also discussed above). We recommend you compare different plans from our website so you can find the right classic car insurance quotes suited to your budget.
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Before buying 2nd hand car insurance, it is necessary to consider factors such as insurance history, claim history, condition, and make and model of the second-hand car. In addition to these factors, it is also important to consider the reputation and claims settlement efficiency of the insurance provider.
Maintenance insurance for used cars claims works in the same way as fresh or new car insurance. Within 24 hours of encountering a covered event, you need to initiate your claim by reporting the incident to our claims team.
Next, document the damages sustained by the insured vehicle and gather the supporting evidence.
Once done, you can fill out a claims form and submit it along with other documents for claims processing. For more information, contact our claims helpline.
Having car insurance for used cars is necessary for several reasons, including fulfilling legal requirements, financial protection in the event of unforeseen accidents, access to quality repairs/replacements at cashless network garages, coverage for personal accidents and more.
Car insurance premiums for a second-hand car are calculated based on factors such as make and model, claims history, insured declared value (IDV), type of policy, level of coverage and any additional car insurance benefits you might have opted for.
You can easily transfer car insurance for a used car to a new insurance company by submitting the specified transfer documents and paying the applicable charges. At this stage, you need to ensure that car insurance is transferred under your name.
Renewing second-hand car insurance is simple. All you need to do is review your coverage requirements, check your insurance expiration date, make the necessary adjustments in the coverage and pay specified renewal charges online. For more information, get in touch with our team.
If no claims have been made with the previous insurance policy, you become eligible for no-claims discounts for the given tenure.
Disclaimer: *T&C apply. For more details on risk factors, terms conditions, brochure, and exclusions, please read the policy wording and CIS carefully before concluding a sale.
Comprehensive car insurance: Details mentioned here are for the product- Reliance Private Car Package Policy. UIN: IRDAN103RP0010V02100001; Reliance Private Car Policy – Bundled, UIN: IRDAN103RP0007V02201819; Reliance Private Car Policy- Standalone Own Damage UIN- IRDAN103RP0001V01201920; "A" Policy for Act Liability Insurance ( Pc /Tw/Commercial ), UIN: IRDAN103RP0003V01200102; A" Policy for Act Liability Insurance (Private Car) – 3 years, UIN: IRDAN103RP0003V01201819.
Network Garages: The number of garages mentioned is the total of all the garages empanelled across the country for different vehicle categories.
Claim Settlement Ratio: This is the overall claim settlement ratio for FY 2023-24 without claim outstanding at the start of the financial year as per public disclosure of Reliance General Insurance Co. Ltd.
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