7 Key considerations when purchasing coverage for your pre-owned vehicle


30 Aug 2023

Navigating Pre-Owned Vehicle Insurance: 7 Essential Factors to Keep in Mind

In India, insuring a used car or bike comes with its own set of considerations. Buying a pre-owned vehicle can be a cost-effective choice, but it's equally important to secure the right insurance coverage. Let's explore seven key factors to keep in mind when purchasing insurance coverage for your pre-owned vehicle in India.

  • Type of coverage

When insuring your pre-owned vehicle, you have two primary types of coverage to choose from: Third-party liability insurance and Comprehensive insurance.

  1. Third-party liability insurance: It covers damages to a third party's vehicle or property and provides coverage for injuries or death caused by your vehicle.

  2. Comprehensive insurance: This offers more extensive coverage, including protection for your vehicle against theft, damage due to accidents, natural calamities and more.

Consider your budget and the value of your pre-owned vehicle when deciding between these options.

  • Vehicle age

Older vehicles may have higher premiums due to their increased susceptibility to wear and tear. The age of your pre-owned vehicle plays a significant role in insurance premium calculations.

  • Insured declared value (IDV)

Ensure that the IDV accurately reflects the current market value of your vehicle to receive adequate compensation in case of a claim. The IDV is the maximum amount your insurer will pay if your vehicle is stolen or suffers a total loss. For pre-owned vehicles, the IDV is typically calculated based on the vehicle's age and market value.

  • No claim bonus (NCB)

Ensure that you transfer the NCB from your previous vehicle (if applicable) when insuring your pre-owned vehicle. If you haven't made any claims in previous policy years, you're entitled to a no-claim bonus (NCB), which can lead to a significant discount on your premium.

  • Vehicle inspection

A vehicle inspection is required before issuing coverage for pre-owned vehicles. Ensure that your vehicle is in good condition and complies with safety and roadworthiness standards to avoid complications during the inspection.

  • Add-on coverage

Consider additional coverage options, known as add-ons or riders, to enhance your insurance policy. These can be especially beneficial for older pre-owned vehicles to ensure comprehensive protection. Common add-ons include zero depreciation, engine protection and roadside assistance.

  • Compare premiums

Compare premiums and read policy terms and conditions carefully. Look for a reputed company like kotak general insurance for prompt claims settlement and excellent customer service.


Well-chosen motor insurance can provide you with peace of mind while driving on India's roads. Insuring your pre-owned vehicle in India is a crucial step to safeguarding your investment and complying with legal requirements.

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Guidelines for comparing vehicle insurance policies online in India
Transfer of car insurance plan when buying a 2nd hand car
8 reasons why you should buy a pre owned car

Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.