Used Car Insurance

Used car insurance is a policy that offers financial protection for a second-hand or pre-owned car. It covers damages from accidents, theft, natural disasters, and third-party liability. Just like a new car, a second-hand or old car must be insured before hitting the road.

The main difference between new and used car insurance lies in the vehicle’s age, condition, and used car insurance cost. Since older cars usually have lower market value, the premiums are often more affordable. However, they may also come with higher risks depending on usage and maintenance history.

Under Indian law, having at least third-party car insurance for used cars is mandatory under the Motor Vehicles Act. Driving an uninsured vehicle can lead to legal penalties. Whether you buy from a dealer or an individual, ensure the car has valid insurance. It ensures safety, legal compliance, and confidence.

Meets the Legal Requirements

The Motor Vehicles Act mandates that all vehicles on Indian roads must carry at least third-party insurance. Whether your vehicle is new or used, skipping insurance can lead to penalties and legal issues.

Protects the Car Owner from Unseen Damages

Second-hand cars often come with hidden risks - older parts, worn-out tyres, or minor engine troubles. A single breakdown or accident can lead to high repair costs. Car insurance for used cars helps cover these expenses. It cushions you financially and ensures that a sudden issue does not burn a hole in your pocket.

Covers Thefts and Natural Disasters

Older cars are often easier targets for theft. Comprehensive old car insurance protects you from financial loss in such cases. It also helps if floods, storms, or fire damage your vehicle. So, even if disaster strikes, you will not be left stranded with zero support or financial help.

Personal Accident Cover for the Owner Driver

All car insurance policies in India include a built-in Personal Accident cover for the owner-driver. It offers financial support if you suffer serious injuries while driving your insured second-hand car. It helps you during recovery and in extreme outcomes related to accident-induced injuries.

Gives You Confidence on Every Drive

Driving a second-hand car should not feel risky. Old car insurance ensures support when things go wrong, on highways or city roads. You focus on the journey, not the “what ifs.” Whether the issue is small or serious, car insurance for used cars keeps your mind clear and wallet safe.

Adds Value to Resale

Maintaining proper insurance records makes your old car more attractive to future buyers. Insurance shows that you have maintained the car well. It builds trust and often helps you get a better resale price. That matters when you plan to upgrade your vehicle later.

Also Read: Why Car Insurance is Mandatory in India?

Third-Party Liability Cover

A third-party car insurance policy is the most basic form of car insurance for used cars, mandated by the IRDAI. It covers damage caused to another person’s vehicle, property, or injuries to third parties. It does not cover any damage to your own vehicle. This cover is legally compulsory for all vehicle owners in India. It is sufficient for very old cars with minimal market value, where own damage coverage may not justify the premium.

Standalone Own Damage Cover

A standalone own damage car insurance policy covers only your car’s damage from accidents, fire, natural disasters, and theft. You must already have a third-party policy to opt for this. This is ideal when you want to secure your own vehicle while keeping premium costs low. It suits those who want flexibility in choosing insurers for different cover types and who want to manage used car insurance costs more efficiently.

Comprehensive Coverage

A comprehensive car insurance policy combines both third-party liability and own damage cover. It offers broad protection from theft, fire, natural disasters, and road accidents. It is best suited for relatively newer pre-owned cars that still hold good resale value. This type of old car insurance lets you add extra protection with optional add-ons. It is a smart choice for buyers who want worry-free ownership and better long-term savings.

Add-ons enhance the value of your old car insurance by offering specific benefits.

• Depreciation Reimbursement: Covers the full cost of replaced parts without deducting depreciation during a claim.
• Return to Invoice: Compensates the original purchase price of your car in the event of a total loss or theft.
• Daily Allowance: Provides a fixed daily allowance when your car is in the garage for repairs.
• Key Replacement: Covers the cost of replacing lost or damaged car keys or remote access devices.
• Engine Secure: Covers repair costs arising from engine damage due to water ingression or oil leakage.
• Tyre Secure: Covers the repair or replacement of tyres damaged due to cuts, bursts, or road hazards.
• Roadside Assistance: Provides on-road assistance for breakdowns, towing, battery jump-starts, or fuel delivery.
• Additional Towing Charges: Covers extra towing costs beyond the standard limit after a breakdown or accident.
• No Claim Bonus Protection Cover: Protects your accumulated no-claim bonus even after making a claim.

Please note: This is a general list of add-on features you can choose along with your car insurance policy. For more information, please refer to the policy document.

Age and Condition of the Car

The older your vehicle, the lower its Insured Declared Value (IDV), which directly reduces the premium. However, poor conditions can raise the risk factor, increasing costs. Many insurers offer car insurance for older cars with customised plans and inspections.

Location of Registration

Car insurance premiums vary based on the car's registration location. Cars in metro cities or high-traffic areas face higher accident risks, raising premiums. For reliable used car insurance, always check zone-by-zone rate differences before selecting a policy.

Car Make and Model

The car make and model affect insurance premiums. Premiums differ across brands and variants. Luxury or high-maintenance models often attract higher car insurance premiums. Choosing a practical model helps reduce costs and makes it easier to find the best car insurance for used cars.

Previous Insurance and Claim History

A clean claim history leads to No Claim Bonus (NCB) benefits, reducing premium amounts. On the other hand, a history of frequent past claims increases your risk profile. When buying insurance for older cars, verify the vehicle’s insurance history carefully.

Type of Policy Chosen

A used car insurance policy can be third-party or comprehensive. While a third-party is mandatory, a comprehensive plan offers broader protection. Comprehensive cover typically costs more but is often the best option for older cars with moderate resale value.

Insured Declared Value (IDV)

The current market value of your vehicle, known as the Insured Declared Value in car insurance, directly affects your car insurance for second-hand car premiums. Declaring the correct value ensures your premium reflects your vehicle's true worth.

Add-Ons Included

Add-ons like zero depreciation, engine protection, or roadside assistance improve coverage but raise premiums. Choose wisely when insuring older vehicles. Some insurance for old cars providers exclude certain add-ons, so check availability and relevance before paying extra.

Also Read: How is Car Insurance Premium Calculated?

Buying car insurance for used cars from TATA AIG is quick and convenient. Follow these simple steps:

• Visit the TATA AIG Website - Go to the official TATA AIG car insurance page to buy car insurance for older cars.
• Enter Car Details - Fill in registration number, make, model, variant, and manufacturing year.
• Share Personal Details - Add your name, mobile number, and city.
• Compare and Customise - Compare car insurance online, select coverage type (third-party or comprehensive), and choose add-ons.
• Review IDV and Premium - Adjust the Insured Declared Value to balance premium and coverage, and choose the best car insurance for used cars.
• Make Payment - Pay online and receive your policy instantly via email.

Also Read: Compare Car Insurance - A Complete Guide

• Steps to Transfer Car Ownership

• Visit the Official Parivahan Sewa - Open the Parivahan Sewa website.

• Go to ‘Online Services’ - Under this option, open ‘Vehicle Related Services’.

• Select Your State and RTO - Choose the correct RTO office where the car is registered.

• Login with Vehicle Details - Use your vehicle registration number and chassis number.

• Apply for an Ownership Transfer - Upload documents such as Form 29, Form 30, address proof, and ID.

• Pay the Fee Online - Make the payment through the portal.

• RTO Verification - Once verified, a new RC will be issued in the buyer's name.

Alternatively, you can visit your Regional Transport Office and complete the ownership transfer of your second-hand car offline.

Steps to Transfer Used Car Insurance

The process of transferring car insurance from one person to another is simple with TATA AIG.

• Inform the insurer - Notify TATA AIG about the sale or purchase and request a transfer of car insurance to the new owner's name.
• Submit documents - Fill out the insurance transfer form and submit it with required documents like the new RC, ID proof, and a previous policy copy.
• Verification and endorsement: TATA AIG will verify the documents and issue an endorsement certificate reflecting the updated ownership details.

Also Read: How to Transfer Vehicle Insurance While Buying a Second-Hand Vehicle?

• The new Registration Certificate of the used vehicle (in original)
• A copy of the car's existing four-wheeler insurance policy
• The proof of the legal transfer of the Registration Certificate of the car and the payment of the associated fee
• Form 29 and 30 signed by the previous owner of the used car
• The proof of the legal sale of the used car
• An application form duly filled out and submitted to the relevant car insurance company
• No Objection Certificate from the previous owner of the used vehicle
• The proof of identity and address of the new owner of the used car

Please note: The insurer may request additional documents depending on the situation or specific details of the vehicle transfer. It is advisable to check the full list of required documents with your insurer in advance.

Special Category for Unique Vehicles

Classic and vintage car insurance is designed for older vehicles that hold collectable or historical value. These cars are often considered prized assets, not just modes of transport.

Agreed Value Coverage

Instead of market value, insurers offer an Agreed Value, a pre-decided amount based on a professional appraisal. This ensures full compensation in the event of a total loss or theft.

Tailored Premiums Based on Usage

Since vintage cars are rarely used daily, old car insurance prices are calculated based on limited usage. Lower risk means more reasonable premiums for events, exhibitions, or short drives.

Essential Documentation

To qualify, you must submit proper registration certificates, proof of age, and, in some cases, certification confirming classic status. This helps the insurer verify eligibility and accurately assess value.

Preserving Legacy with Protection

This specialised old car insurance helps owners protect the legacy of their valuable automobiles with the right financial safety net.

Also Read: What Is Classic & Vintage Car Insurance & How Does It Work?

• Ensure You Have a Proper Inspection Report - Before buying car insurance for older cars, get a detailed inspection report. It helps the insurer assess vehicle condition and set a fair premium. This step is especially important for older models with visible wear or mechanical concerns.
• Check the Verified Claim History - Request the claim history from the previous owner. A clean track record can lower your used car insurance costs. Multiple past claims may raise red flags or premiums, especially if you are buying cars that are 10 years old or more.
• Maintain Detailed Service and Maintenance Records - Well-documented maintenance proves the car was cared for. This reassures insurers and improves your chances of getting affordable used car insurance for repairs. It can also boost the car’s resale value later.
• Keep Ownership Documents Ready - Proper ownership paperwork, including RC, Form 29 & 30, and ID proof, is essential for insurance. Without them, transferring or buying car insurance for older cars becomes difficult or delayed.
• Set the Right Insured Declared Value (IDV) - For older vehicles, an accurate IDV is crucial. It affects both premium and claim payout. A realistic IDV ensures your used car insurance offers value without overpaying or under-insuring your car.
• Compare Multiple Options - Do not settle for the first plan you come across. Compare quotes, features, and add-ons across plans. It helps answer the common question: Is insurance cheaper for older cars? By finding the most cost-effective plan with decent coverage.
• Complete the Ownership Transfer First - Before purchasing or updating insurance, make sure the RC is transferred to your name. Insurance cannot be legally transferred until ownership is officially updated, even for cars for 10-year-olds or older.

• Claim Settlement Ratio - Choose an insurer with a high claim settlement ratio to ensure timely and fair payouts in case of damage or loss.
• Premium of the Car Insurance Policy - Check if the premium of a car insurance policy matches the car’s value and condition. For older cars, lower IDV usually means more affordable premiums.
• Service Quality - Opt for insurers with good customer service and a professional team of customer support to assist right from policy purchase to claim settlement.
• Ease of Claim Process - Look for insurers offering digital claim processes, quick approvals, minimal paperwork, and a high claim settlement ratio, especially important for used car insurance.
• Support for Inspection and NCB - Ensure the insurer offers guidance for pre-insurance inspections and easy transfer of No Claim Bonus from the previous policy.
• Garage Network of the Chosen Insurer - A strong network of authorised garages ensures you can access trusted service centres close to your location without hassle.
• Car’s Age and Depreciation - Understand how your car’s age impacts the IDV. The older the car, the higher the depreciation and the lower the coverage value.

No Claim Bonus (NCB) is a reward for not raising any claims during your policy term. It reduces your renewal premium by a fixed percentage. When buying a second-hand car, you can retain NCB by transferring it from your previous policy using a valid NCB certificate.

NCB is linked to the policyholder, not the vehicle, so you can use it across insurers. It remains valid for up to 90 days after policy expiry and is portable when switching to new used car insurance.

Read More: NCB (No Claim Bonus) in Car Insurance

• Request Inspection - After applying for old car insurance, your insurer will schedule a physical or digital inspection.
• Prepare the Car - Clean the vehicle, repair minor damages, and ensure it is easily accessible for inspection.
• Keep Documents Ready - Have the RC, PUC, previous insurance (if any), and ID proof available for verification.
• Undergo Inspection - An official checks the car’s condition, existing damages, registration details, and takes photos.
• Report Evaluation - Based on the inspection, the insurer approves or adjusts your policy terms and used car insurance cost accordingly.

• Ignoring Inspection Reports - Skipping the inspection report can hide existing damages or issues, leading to claim rejections or incorrect premium calculation later.
• Choosing Only the Cheapest Policy - Low premiums may mean limited coverage. Always check what the policy includes to ensure complete protection for your older car.
• Not Transferring the Policy On Time - Delaying the insurance transfer after buying a used car can make the policy invalid and expose you to legal and financial risks.
• Missing Claim History Verification - Not checking the car’s past claim records may lead to surprises later, especially if the vehicle has had frequent accidents or repairs.
• Overlooking the Insured Declared Value (IDV) - Choosing a very low IDV to reduce the premium may hurt your payout during a claim. Always set a fair, market-aligned value.
• Ignoring Add-On Covers - Skipping useful add-ons like Zero Depreciation or Roadside Assistance can limit your protection, especially for frequently used vehicles.

• Avoid Unnecessary Add-Ons - Select only essential covers, especially for older cars with limited use or lower market value.
• Install Anti-Theft Devices - Certified security systems reduce theft risk, making your car eligible for lower insurance premiums.
• Maintain a Clean Driving Record - No traffic violations or past claims show you as a low-risk driver and help reduce the old car insurance price.
• Transfer Your No Claim Bonus (NCB) - Carry forward your NCB to your new policy and enjoy a premium discount for claim-free years.
• Opt for a Higher Voluntary Deductible - Agreeing to pay a higher share during claims lowers your yearly premium cost.
• Compare Multiple Insurers - Different policies have varied coverage and rates. Comparing quotes helps you pick the best plan at the lowest cost.
• Renew Your Policy before Expiry - Timely renewal avoids inspection, penalty, and premium hikes, keeping your used car insurance cost steady.

Also Read: How to Reduce Car Insurance Premium

With rising maintenance costs and unpredictable road risks, getting the right car insurance policy for your used vehicle is no longer optional; it is essential. A well-chosen policy protects your savings, boosts your resale value, and gives you peace of mind every time you drive.

At TATA AIG, we understand that second-hand vehicles deserve first-class protection. That is why we offer flexible plans for both comprehensive and 3rd-party car insurance, tailored to your car’s age and condition.

We also make it easy to buy car insurance online with a quick, paperless process and instant policy issuance. From convenient renewals to a strong garage network and customer-first claims process, TATA AIG supports you every step of the way. Whether your vehicle is brand new or ten years old, our car insurance plans ensure it stays protected.

Choose TATA AIG today and drive confidently with 4-wheeler insurance that truly understands your car.