Add-on Covers With Your Car Insurance

Having a car insurance is mandatory under the Motor Vehicles Act in India.

However, just having basic car insurance may not be enough to face rising costs of repairing and maintaining a car. Despite existing car insurance plans, people have to shell out money from their own pockets in case of an accident or some other calamity. Keeping this in mind the car insurance companies have come out with various add-ons/riders on your existing policies to help you save some money.

What are Add-ons?

An add-on is an additional benefit added to your existing car policy that covers your car against unforeseen expenses, and you can have it by paying the extra premium. There are various types of add-ons, and you can select the one according to your requirements.

Types of Add-ons

Every car company offers different types of add-ons, but here we present to you the most common and important ones that you should consider adding on your car policy:

1) Zero Depreciation

After an accident, some of the car parts have to be changed. However, depending on how old the car is, the insurer pays as per the depreciated value of the spares required to be replaced instead of their current value. With zero depreciation cover, you get the claim as per the actual value of spare parts and helps you save a substantial amount of money.

2) Engine Cover

The most important part of the car can cause massive damage to your finances in case it gets damaged due to flooding. There is no insurance policy that covers that kind of damage, so an add-on to cover such risks is therefore offered by the insurers for vehicles up to three years old. Repairing or replacing the engine and electronic circuit is really an expensive affair that can be avoided by buying engine cover.

3) Return to Invoice

Ideally, a car is valued as per the Insured Declared Value (IDV) that is lower than the actual value of the car. If your car gets totally damaged in an accident or you lose it due to theft, the insurer will pay you a claim as per IDV. But with this add-on, you can get the actual value of your car without deducting the registration charges, road tax and any depreciation calculated on it.

4) No Claim Bonus (NCB) Cover

NCB is applicable after every claim-free year, and it starts at 20% discount on the premium after the first year and goes up to 50% after 5 consecutive claims free years. However, even one claim can bring down this bonus to zero, but with NCB cover, you can file a claim yet maintain your NCB bonus intact for the following year. The only thing to consider is there are conditions applied on this add-on that vary from insurer to insurer so study the terms carefully.

5) Assistance on Road

A car can breakdown anywhere or can face a flat tyre or might develop some battery related issues. Being in a secluded location or at a place where there is no garage might leave you stranded without help. This cover ensures that the insurer arranges for your car to be towed away to a garage and get you help to reach your destination.

6) Accidental Cover

This cover applies to both the owner as well as the paid driver of the vehicle. Under this plan, the insurer will pay 100% claims if the passengers/driver in the car dies or permanently lose their limbs in an accident. This is one of the most important add-ons to have on your car policy.

7) Daily Allowance

If your car is at a garage for repairs, this cover helps you with cash to arrange for an alternative mode of transport till you get your car back. It is normally given for 10–15 days and ranges from Rs. 500-Rs. 1000 depending on the model of the car.

8) Key Replacement Benefit

If you lose your key and require getting a new key and lock, this add-on can help you get the actual cost of it rather than just a limited amount that insurance companies usually offer.

All of the above add-ons might or might not be useful for you. Select as per your requirements and ensure you have a complete car insurance plan.