Should You Buy a Second-Hand Car Insurance Policy?

09 Feb 2019

You are a proud owner of a second-hand car, but what about insurance, do you have to buy it? The quickest answer is yes, however, you also need to know why second-hand car insurance is necessary.

Next Steps After Purchasing a Used Car

India’s Motor Vehicle Act-Section 157 makes it mandatory for the owner to transfer car insurance for a second-hand car to their name within 14 days of purchase. There are two aspects of such a policy, third-party and own damage. While the former is transferred automatically, you have to register the latter yourself. In case you do not have both within the stipulated timeframe, no insurance company will assist you for any future claims.

Third-party insurance protects against damages to a third party by an insured vehicle. It covers physical injuries, vehicle/property damage, and death. Whereas own-damage insurance covers you against damages to you or your own damaged vehicle that is insured.

What Happens If You Ignore Purchasing Insurance

Buying a second-hand car insurance policy is the responsibility of the new owner and the previous one. An insurance provider can reject a claim, third-party or own damage, if the insured vehicle is not in the name of the current owner. Many assume that the onus is not on the previous owner, however, a third-party can hold them legally accountable in case of vehicle damage or physical injury.

Transfer Process

It helps to begin the paperwork of your second-hand car insurance policy as soon as you complete the buying transaction. These are the general documents and procedure for your vehicle:

Step 1: Fill out a new proposal form, and attach the below two documents:

• Evidence of sale like an RC transfer receipt
• Forms 29 and 30 duly with the previous owner’s signature
• Copy of the previous policy
• Transfer fee

Submitted the above to your insurance company, for the transfer endorsement.

Step 2: Submit a copy of the new RC to to the insurance provider once you receive from your local Residential Transport Office (RTO). This document is mandatory for all your future second-hand car insurance claims.

Tackling RC Transfer Delays

Here is what you must do to register a claim on your second-hand car policy during the transfer process:

• Provide a proof of transfer to your insurer: This helps in registering future claims or probably avoiding any policy rejection in case the RC doesn’t reflect a change of ownership.
• Remember to submit a copy of the RC book: In case you damage your used car before the RC is transferred, your insurer will not repudiate your claim. But will pay it only once you submit a proof of RC transfer.

Who Can Initiate the Transfer Process

You and the previous owner can carry out the transfer process yourselves, through an agent or broker or through the dealership from where you bought the used cars.

Buying second-hand car insurance directly helps you avoid brokerage costs and you can also choose your insurance provider. If you opt for a broker or used car dealership, you may not have to choose an insurer. The advantage is that you become eligible for offers on car-care packages like free servicing, extended warranties on car parts and repairs.

It is easy to choose a second-hand car insurance online and pick a coverage plan that suits your budget. This type of policy is necessary to have a hassle-free claim process in case your car is involved in an accident or damaged.

Are you looking for the most competitive second-hand car insurance prices? Visit Liberty General Insurance’s website today to find out more.

Disclaimer: For more details on risk factors, terms & conditions please read sales brochure carefully before concluding a sale. *The discount amount will vary subject to vehicle specification and place of registration