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How to Select the Best Used Car Insurance Policy?

January 15, 2024 • 2570 views

Getting your used car insured is a must. Car insurance safeguards you, your car, and your wallet from unforeseen events like accidents, theft, or natural disasters. However, with numerous options available, the selection process can be complex. This blog lists why you need car insurance for a used car, types of car insurance, add-on covers you may select, the best way to select a car insurance and how to apply for it. Read on!

Why Do You Need Second-hand Car Insurance?

It is mandatory for new and used cars to be insured as per the Motor Vehicles Act of 1988. While a third-party policy addresses the financial obligations of victims other than the policyholder, it is highly advisable to opt for a comprehensive car insurance policy. With a comprehensive insurance policy, you can access the following benefits:

  • Financial protection against damages to your vehicle resulting from an accident, regardless of fault.
  • Seamless handling treatment costs, along with pre and post-hospitalisation charges of the policyholder.
  • Easily pay for the damages inflicted upon a third party due to an accident.

Types of Insurances for Used Cars

India's auto insurance for used cars landscape offers diverse options to cater to every driver's needs. Choosing the right policy can sometimes feel overwhelming. Here are all the different types of insurance available in India for used cars:

Comprehensive Car Insurance

This is the most popular choice, offering a complete shield against both third-party liabilities and damage to your car. Whether it is a fender bender, a stolen joyride, or a storm-induced dent, comprehensive insurance has your back, providing peace of mind and financial reassurance.

Third Party Car Insurance

This type of used car insurance is a mandatory legal requirement and only covers the financial obligations towards any third party that your car might harm or whose property it might damage. Although it is an economical option, it does not cover any damages to your car in the event of theft, accidents, or natural disasters.

Own Damage Car Insurance

It is a type of 2nd-hand car insurance policy that serves as coverage for damages to your vehicle resulting from accidents, theft, fire, natural disasters, and specified perils. Serving as an alternative to comprehensive car insurance, it concentrates solely on safeguarding your vehicle.

Also Read - Difference Between New vs Pre-owned Car Loan

Add-on Covers in a Used Car Insurance Policy

Your car insurance for used cars policy provides essential protection, but you can elevate it to a whole new level with exclusive add-on covers. These optional extras cater to specific needs and offer peace of mind. Here are some popular options to consider:

  • Zero Depreciation Cover: Ensures you receive the entire claim amount without any depreciation on the price of parts during replacements or repairs.
  • Engine Protection Cover: This add-on policy covers damages incurred to the engine that are not covered in the comprehensive policy.
  • Roadside Assistance Cover: Assists in emergencies like flat tires, battery jump-start, towing, and more.
  • No Claim Bonus Protection: Safeguards your earned No Claim Bonus (NCB) even if a claim is made during the policy period.
  • Personal Accident Cover: Offers coverage for accidental injuries or the policyholder's death while driving the insured vehicle.

How to Choose the Right Car Insurance Policy?

When deciding on a used car insurance policy, several factors, including coverage scope, claim settlement ratio, and cashless repairs, play a crucial role in making the right choice. Here are some considerations:

  • Pick an Appropriate Policy Coverage: While third-party insurance is adequate to cover traffic challans, opting for a comprehensive policy ensures complete financial protection for your vehicle in the event of accidents.
  • Check Insurer Claim Settlement Ratio: Before purchasing a car insurance, verify the insurance company's claim settlement ratio. A lower CSR implies a reduced likelihood of your claims being settled. Therefore, it would be prudent to choose an insurer with a higher CSR.
  • Choose a Suitable IDV: Opt for an Insured Declared Value (IDV) that closely aligns with the market price of your car. Although a lower IDV can help you save on premiums, it may lead to excess out-of-pocket expenses later.

How to Apply for a Used Car Loan?

If you are looking to purchase a second-hand or used car, here’s how you can apply:

Step 1: Click on 'Apply Now' and furnish your contact details along with loan information.

Step 2: Enter your Date of Birth (DOB), qualifications, and other personal information.

Step 3: Upload the required documents and hit the ‘Submit’ button.

Your application will undergo verification and assessment after submission. Once done, you will receive the loan amount in your bank account.

Also Read - 5 Things to Know Before Borrowing a Pre-Owned Car Loan

To Conclude

It is essential to select the right used car insurance to stay financially prepared for adversities when driving on the road. Also, the importance of choosing the right insurance provider with a higher claim settlement ratio cannot be overstated, ensuring a smoother and more reliable claims process. So, make sure to select the right insurer and a top-rated lender when exploring insurance and financing options for your second-hand vehicles.

When looking for financing options for a used car, explore the Pre-owned Car Loan from Poonawala Fincorp. Enjoy minimal documentation, flexible EMIs, no hidden charges, and quick approval.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Pre-Owned Car Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

We are a team of expert writers and editors passionate about providing our readers with authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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