Do You Need Insurance for a Used Car? Here’s Why

Uzone.id – If you want to have a car, it doesn’t always have to be a new car. For a limited budget, you can choose a used car, especially one that is still in good condition.

However, it should be understood that used cars have a higher risk of damage due to their generally older age or the risk of use by the previous vehicle owner. Therefore, insurance protection is very important. 

Used car insurance is a type of insurance specifically for cars purchased not new. Usually, if we buy a used car that is insured, we only need to change the name. However, if the car is used or the second is not insured, you can insure it yourself. 

But of course, you have to pay attention to the age of the car because the insurance company has a maximum age for car coverage.

“One of the reasons for insuring a used car is that its performance has declined, so there is a possibility that it will cost more to repair it, compared to a new car,” said Heru Panatas, Motor Vehicle Claim Manager at Roojai.

Especially when the used car we buy is still within the credit period, we must notify the insurance company. The goal is that one day when we want to make a claim, it won’t be rejected just because there was no notification that the car has changed hands.

The way to change the name of used car insurance is quite easy:

1. Inform the insurance company that the car has changed hands.
2. Complete the required documents, such as vehicle registration and sale and purchase deed or vehicle payment receipt.
3. When the documents are complete, the new owner can apply to the relevant insurance company branch office.
4. After the application process, the insurance company will check the documents.
5. When the documents are complete, the insurance company will issue a file called endorsement by including the name of the most recent vehicle owner as the guarantor. 
6. Next, you as the new owner must pay the premium according to the insurance company’s policy.

Keep in mind that sometimes the used car insurance costs that must be paid may be different from those of the previous owner. 

This depends on the policy of the relevant insurance company regarding the price of insurance premiums for used cars changing hands.

Types of Used Car Insurance

As with new car insurance, used car owners can also choose the type of insurance according to their needs. There are two types of used car insurance, namely all risk and TLO (Total Loss Only). Following is the complete information:

1. Used Car All Risk Insurance

All-risk used car insurance is a type of car insurance that covers all types of damage, including loss. Because the coverage provided is more comprehensive, the all-risk premium price is more expensive than TLO.

However, for those of you who own used cars, all risk insurance is only available for cars under 10 years old. This relates to the availability of spare parts when a claim occurs at a later date.

2. TLO Used Car Insurance

The most popular type of cheap used car insurance is TLO. This is due to the price of TLO insurance premiums cheaper so you can save expenses.

However, TLO car insurance only covers the risk of damage above 75 percent and loss. So, if your car is dented or scratched, you cannot claim this insurance policy.

Then, Best Used Car Insurance All Risk or TLO?

You will of course be wondering if the best insurance for used cars is all risk or TLO. It all depends on individual needs. 

However, if you have a used car that is more than 5 years old, it would be better to use TLO used car insurance. 

Apart from the cheaper TLO insurance costs for used cars, this type of insurance can also cover the age of the car up to a maximum of 20 years.

2024 Used Car Insurance Trends to Watch Out for

Today, the used car insurance industry continues to grow rapidly, following broader trends in the automotive and technology markets. Here are some main trends:

1. Increasing Adoption of InsurTech:

The application of technology such as artificial intelligence (AI), machine learning (ML), and data analytics will continue to grow in the used car insurance industry.

This allows insurance companies to assess risk more accurately with muses vehicle data, driver history, and other factors to determine fairer and more personalized insurance premiums.

Technology also makes the claims process faster and more efficient because by automating the claims process, policyholders can receive payments more quickly.

In addition, can also offer more personalized products and services and provide insurance recommendations tailored to the individual needs of policyholders.

2. Focus on Accident Prevention:

Used car insurance companies will focus more on preventing accidents rather than simply compensating for losses after they occur.

Therefore insurance companies usually make several efforts, such as offering telematics programs using providing premium discounts to drivers who use telematics devices.

That way, insurers can track their driving habits and promote safe driving behavior.

Then partner with a car repair shop to be able to provide regular vehicle inspection and maintenance services to help prevent damage and accidents.

And what is no less important, educate drivers about safety, by offering defensive driving courses and road safety tips.

3. Growth in Value-Based Insurance:

Consumers are increasingly interested in used car insurance products that support sustainable practices and promote road safety.

Consumers are also interested in insurance that rewards environmentally friendly drivers, such as providing premium discounts to drivers who use fuel-efficient vehicles or drive in an environmentally friendly manner.

Insurance can also support road safety initiatives, by supporting organizations working to improve road safety and reduce the number of accidents.

Now many insurers use technology to improve safety, such as investing in technology like emergency automatic braking and lane departure warnings to help prevent accidents.

4. Improved Cybersecurity:

As cybersecurity threats increase, used car insurance companies will invest more in security measures to protect customer data.

The method is improved data encryption to protect customer data from unauthorized access.

Then implement two-factor authentication to make customer accounts harder to hack.

And also train employees on cyber security awareness to help prevent data breaches.

In conclusion, the used car insurance industry continues to grow rapidly, with new trends emerging all the time. 

Insurance companies that can adapt to these trends and innovate will be well-positioned for future success.

As a consumer, it is important to stay up-to-date with the latest trends and compare various insurance options before purchasing a policy.