Second Hand Car Insurance: Types, Benefits and How to Buy
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Old or new, every car must be insured before you can take it out for a spin in the UAE. While buying and insuring a new car can be easy, getting an insurance for a second-hand one can be a bit confusing, especially to a newbie. There are certain factors that you need to keep in mind before buying insurance for a used car. The UAE being in the centre of car aficionado universe, the priority of finding the perfect car, whether new or used, becomes even more highlighted. Regardless of the kind of car you have, getting car insurance for used cars is going to be a much different process than getting care insurance for new cars in the UAE. So, let’s see everything that you will need to know about car insurance for used cars in the country.
Types of Insurance for Used Cars in the UAE
There are two basic kinds of car insurance plans that you can get for any car in the UAE, new or second hand:
Third-Party Car Insurance
A third-party liability car insurance is the most basic form of car insurance and is a must-have for all car owners. It covers all third-party liabilities that arise from an accident where you, the insurance holder, are at fault. This includes third-party vehicle damages as well as third-party injuries and medical expenses. Own vehicle or injuries are not covered by a third-party car insurance plan.
Comprehensive Car Insurance for Used Cars
A comprehensive car insurance plan covers both your damages and the third-party liabilities for an accident where you are at fault. The inclusions of a comprehensive car insurance plan include third-party liabilities for vehicle damages and injuries, own injuries and vehicle damages due to an accident, a collision, man-made disasters like vandalism, natural disasters like storms or theft. Several add-on covers can also be taken with a comprehensive cat insurance plan.
Which One’s a Suitable Car Insurance Plan for Me?
The types of car insurance you buy depends your recently bought second-hand car largely depends on the age of the car and how much you plan to drive it. If the used car you bought is fairly new, going with comprehensive insurance for used cars for a few years is a good idea. The market price of the car will still be decent and you won’t have to spend thousands of Dirhams on repairs if the car ever is in an accident. Choose to go for a comprehensive plan with minimal benefits if the used car you have bought is a practice car, will be driven a lot and could be at the potential danger of collisions.
Can Car Insurance for Used Cars Be Transferred?
Yes, the current insurance that the previous owner of the car has can be transferred to the new owner, aka you. But there are a few rules that you need to take care of. Only current insurances with more than 9 months remaining on the tenure can be transferred. So, if the current car insurance of the used car that you are buying has anything less than 9 months on it, it can not be transferred to the new owner. Second, not all insurance companies offer the facility of transfer. While most top car insurance companies in the UAE would let you transfer your car insurance for used cars, you should still confirm it once with the provider. If the plan turns out to be non-transferrable, the previous owner can cancel the policy and get a refund on a pro-rata basis. You can look into new options for car insurance for used cars.
How to Get Existing Used Car Insurance Transferred?
If the current car insurance plan of your second-hand car is indeed eligible to be transferred, a series of steps need to be followed. Below are the things you will need to do:
- The transfer of used car insurance is done after the transfer of ownership has been completed. You will need proof of ownership of the vehicle to get the insurance transferred.
- Get the previous owner of the car and the current owner of the insurance plan to contact the insurance company well in advance about the upcoming transfer.
- Note that insurance transfer has to be done immediately after the ownership transfer process is complete. Every insurance company sets a deadline for a used car insurance transfer. If not renewed in the given time, the insurance policy can stand void.
- Once the ownership has been done, fill out the due forms for the transfer of the insurance plan and submit the documents.
- The insurance company may send a vehicle inspector to record the condition of the vehicle as well.
- You can make the changes you like to the existing plan at this point too. The insurance company may also suggest some add-ons for your benefit.
- As soon as these formalities are done, your car insurance for a used car will be transferred successfully.
Documents Required for Car Insurance for Used Cars Transfer
Given below is the list of documents that you will need when getting the previous car insurance transferred:
- Proof of existing car insurance policy
- A NOC or no objection certificate from the owner
- A duly filled car insurance transfer application form
- Proof of ownership of the new owner
- Original registration certificate and documents of the car
- Car inspection report – the inspection report from RTA received at the time of ownership transfer can also work here.
Will You Get the No Claim Bonus as Well?
Even though the insurance policy is for the car to have, the no claim bonus is earned by the insurance holder. This means that the no claim bonus stays with the owner instead of the car. In short, if there is any accumulated no claim bonus on the previous car insurance plan, you can not get it when the car insurance plan is transferred to you. The previous owner gets it. They can obtain a no claim bonus certificate from the insurance company and apply when they buy their next car insurance to get a discount on the premium. You can do the same thing if you have previously accumulated NCB from any of your previous car insurance policies.
How to Buy a New Car Insurance for Second-Hand Cars
In case, the current car insurance for the used car that you bought is non-transferrable, you will need to buy a new car insurance plan. Of course, you can buy any plan you feel like without apprehensions, however, make sure you have weighed in all the factors ideally. Following are the basic steps you will need to follow when buying car insurance for used cars:
- Choose an Insurance aggregator or an insurance company directly and finalize the plan that you need to buy.
- There is two basic way you can go about purchasing the plan – online and offline.
- For offline purchases, visit the branch office of the insurance company and buy the plan after completing some formalities.
- For online purchases, visit the aggregator or provider’s website and go to the car insurance page. Find the online purchasing portal and continue with the procedure.
- You will be required to enter a few details about the car and the plan that you want here. Choose the IDV of the vehicle and the add-ons that you would like to buy, if applicable.
- Upload the documents required on the uploading panel.
- Read the terms and conditions and click submit.
- If required, an inspector will come to check the vehicle before you can make final payments and complete the process.
- Within 24 hours of r4eceiving the approved inspection results, make the final payments and buy the plan.
Documents Required to Buy New Car Insurance for Used Cars
Following are the documents you will need to buy new car insurance for used cars that you just bought:
- Proof of ownership of the car
- Registration certificate of the car – original
- Car inspection report, if applicable
- A copy of your driving license
Things to Keep in Mind When Buying and Insuring Used Cars
Several small but important things should be kept in mind when you set out to buy and insure a second-hand car. Given below is a small checklist for you:
- Always buy your second-hand car from a trusted dealership or online dealer. You can buy the car directly from the seller as well if you know and trust them to be authentic.
- Get it thoroughly checked by a professional mechanic you trust. Second-hand cars require a more thorough inspection.
- Talk with the previous insurance company that insured the car when it was owned by the previous owner. Find out the claim history of the previous owner to the kind of troubles the car generally faced in the past.
- Consider the mileage of the car as well. Cars that are driven less often get additional discounts on the insurance plans.
- Always make a firm decision on buying the car when you have checked it thoroughly n person. Do not rely entirely on pictures.
- Verify the identification of the seller as well as the vehicle. Stay wary of the frauds by being on you’re a-game.
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FAQs
Ans. Unfortunately, you can only drive a car in the UAE when you have valid insurance in your hand. It is illegal to drive a car without proper insurance papers or proof of insurance on your person at all times.
Ans. There are no government implied fees or charges for the transfer of car insurance of used cars. However, there can be a specific fee set individually by the insurance providers. Make sure you check with your insurance company for these fees.
Ans. The no-claim bonus accumulated from the current or previous insurance plan of the car will go to the previous owner who owned the car insurance plan. Although, if you have had a car in the recent past before buying a new second-hand car, you can the no claim bonus transferred to your new car insurance policy. But you will need a transfer certificate from your previous insurance company. Obtain that and get to know the deadlines for this task as well.
Ans. The insured declared value (IDV) of a car is defined by the present market price of the vehicle. You can still choose the IDV when buying car insurance for used cars. If you choose a value much higher than the market price of the car, you will have to pay an additional premium. If it is close to the market price of the car, you will not be paying any extra premium.
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