How to Select the Best Used Car Insurance Policy?

Under the Motor Vehicles Act of 1988, every vehicle owner must have valid motor insurance for their vehicle. A good car insurance policy will give you protection against accidents, theft and third-party liabilities whilst ensuring your finances remain untouched. Selecting the right car insurance policy for a used car can be overwhelming with the various insurance providers in the market. 

This guide will help you understand the different types of car insurance coverage, assess premium factors, and choose the best insurance provider.

Types of Car Insurance Policy for Used Cars

When purchasing car insurance online for a second-hand car, it is necessary to understand various types of policies. Compare car insurance plans carefully before buying to ensure you get enough protection for your car.

Comprehensive Car Insurance Policy

A comprehensive car insurance plan is an insurance policy that covers own damage and third-party liability. This comprehensive insurance protects against accidents, theft, fire, and natural disasters. Vehicle owners prefer a comprehensive car insurance policy because it provides maximum financial security for their private cars, including damage to the insured car.

Third Party Car Insurance

Third-party insurance is compulsory under the Motor Vehicles Act. This insurance policy provides third-party liability coverage in the event the offender causes injuries or property damage with a motor vehicle. Although the car insurance premium is lower, third-party car insurance does not cover damage to your car. It only covers financial obligations to third parties affected by accidents involving your insured vehicle.

Own Damage Car Insurance

Own Damage (OD) car insurance covers repairs to your vehicle due to accidents, theft, fire, or natural disasters. This coverage protects your car itself; however, it must be combined with mandatory third-party insurance to comply with legal requirements. Together, they provide comprehensive protection for both your vehicle and third-party liabilities.

Essential Add-on Covers for Car Insurance Coverage

Improve your car insurance policy online with useful additional covers.

How to Choose the Right Car Insurance Company?

Several factors contribute to your decision when you are buying car insurance online. Consider these factors to find the best car insurance provider for your used car.

Select Appropriate Insured Declared Value (IDV)

The insured declared value IDV is the current market worth of the vehicle in question. This is the declared value IDV that IDV has as its maximum car insurance claim payout in the case of a total loss or car theft. Choose an insured declared value that is an appropriate price for your car. 

A lower IDV lowers insurance premiums; however, it may result in insufficient compensation when submitting insurance claims for a car accident online.

Verify Car Insurance Claim Settlement Ratio

IRDAI mandates that insurance claims be settled on time, with most standard claims generally processed within 30 days. However, more complex claims may take longer. Check the car insurance company's claim settlement ratio before buying. A higher ratio means reliable claim processing. This ensures that your car insurance claim is handled by the insurance company as quickly as possible.

Consider Car Insurance Renewal Price and Process

Evaluate the online car insurance renewal process and the renewal price before committing. Many insurers provide very convenient online car insurance renewal systems. Check whether it is easy for you to renew car insurance online and whether the car insurance renewal will offer competitive rates. Don't let your policy lapse into expired car insurance.

To Conclude

Selecting the right car insurance for a used car requires a careful evaluation of online insurance policies and providers. Prioritise an extensive car insurance policy with sufficient insured declared value and important add-on covers. Regularly renew your car insurance to avoid an expired policy. Also, compare car insurance plans from different providers to find the best rates and coverage that meet your requirements.

Looking for a used car loan? If so, explore the used car loan from Poonawalla Fincorp. Enjoy minimal documentation, flexible repayment tenure, no hidden charges, and quick approval.

Read Also: Difference Between New vs Pre-Owned Car Loan

FAQs

What is the difference between comprehensive car insurance and third-party car insurance?

Comprehensive car insurance includes both own damage and third-party liability, whilst third-party insurance only includes damages to others.

How does insured declared value (IDV) affect my car insurance premium?

A higher insured declared value IDV will increase your insurance premium; however, will give you better compensation in the event of a total loss or theft claim.

Can I renew car insurance online for an expired car insurance policy?

Yes, most insurance providers permit online car insurance Renewal though an expired insurance policy may require a vehicle inspection before the renewal of your car insurance.

Is personal accident cover mandatory for vehicle owners in India?

As per IRDAI, the minimum personal accident coverage for the owner-driver is Rs. 15 Lakh for private cars.

How can I transfer car insurance when buying a second-hand car?

Contact the insurance company with the car insurance policy document and submit the transfer application with the required identity proofs.