In India, the law requires that one possesses a third-party insurance cover. However, many perceive car insurance as a burden due to this obligation. But when they encounter a crisis, they realise the potential benefits of having a car insurance policy. Although third-party insurance is mandatory, comprehensive insurance provides better coverage for the invested money. It also allows for policy customisation to suit one’s specific needs.
Insurance companies in India offer several policy add-ons that provide significant protection for four-wheelers, giving their owners a sense of security. However, buyers need clarification on various car insurance add-ons and their functionalities.
This blog aims to discuss some of the most popular add-ons, highlighting their potential benefits and how they can amplify one’s car insurance coverage.
What are car insurance add-ons?
In car insurance, add-ons are a valuable way to amplify the financial protection offered by a standard policy. These additional features, such as zero depreciation cover, No Claim Bonus cover, and return to invoice cover, can augment your peace of mind and cushion against unforeseen financial burdens.
However, it is vital to note that these enhancements come at an extra cost. As a result, the premium for the policy may increase when you include add-ons. Furthermore, it is crucial to understand that add-ons are exclusively available for standalone or comprehensive insurance policies. They cannot be added to third-party insurance policies, which only cover damage to a third-party vehicle and loss.
Since add-ons pertain specifically to the policyholder’s vehicle, comprehensive or standalone insurance policies are essential to benefit from them. In this sense, add-ons are an investment in securing additional protection for your vehicle, above and beyond the basic coverage provided by a standard policy.
Benefits of car insurance add-ons
Car insurance add-ons offer a host of benefits that you can easily avail of online. Let us explore some of the top advantages of investing in several add-ons.
Avoid depreciation cost
As with many assets, the value of a car depreciates over time due to regular wear and tear. And if an accident occurs, the car insurance policy may not cover the depreciation cost, and you would have to pay for it out of your pocket. However, avoiding this cost is possible with the zero depreciation cover add-on.
Get emergency assistance
Imagine being stuck in the middle of nowhere due to a car breakdown or other issues. This can be aggravating, stressful, and even dangerous. In such cases, the roadside assistance cover add-on provides you with immediate assistance.
Coverage against death or disability
The personal accident add-on in motor insurance extends financial protection to the policyholder or their family in case of unfortunate like disability or death. This add-on also covers the passengers.
Types of car insurance add-ons available
Zero depreciation cover
When you file a claim for car insurance, the insurance company calculates the depreciation of the car parts, which reduces the claim amount you receive. However, with a zero depreciation cover, the insurance company will not consider the depreciation while processing your claim.
For example, if your car is involved in an accident, and the repair cost is Rs 1000, and the depreciation rate of the car parts is 20%, without the zero depreciation cover, you will receive only Rs 800 as the claim amount (i.e., 1000 – 20% of 1000 = 800). However, with zero depreciation cover, you will receive the entire Rs 1000 as the claim amount, as the insurance company will not deduct any depreciation amount.
Roadside assistance cover
Roadside assistance cover provides emergency assistance to the insured vehicle in case of a breakdown or accident while driving. The services offered under roadside assistance coverage can vary depending on the insurance company and the selected plan. Some of the popular services provided include:
- Towing the car to the nearest authorised service centre or garage
- Repairing minor issues like flat tires or battery jump-start
- Arranging for alternate transportation or accommodation if required
- Providing emergency fuel in case of fuel exhaustion
- Lockout assistance if you lock yourself out of your car
Key replacement cover
Key replacement cover provides financial protection if you lose your car keys or they are stolen. This coverage helps you pay for replacing your car keys and any related expenses, such as reprogramming your key fob or replacing your car’s locks if necessary.
Engine protection cover
This cover provides financial protection against damage to your car’s engine due to certain specified events, such as hydrostatic lock, engine oil leakage, gearbox damage, etc. A hydrostatic lock occurs when water enters the engine cylinder during a flood or any such incident, and the engine stops functioning.
No Claim Bonus protection
NCB is a discount that you can earn on your car insurance premium for every claim-free year. It can help you reduce your car insurance premium significantly over time. With NCB protection cover, you can make one or more claims during the policy term without losing your accumulated rewards.
Return to invoice
This cover can help you bridge the gap between the actual purchase price of your car and the amount you would receive from your insurance company in case of a total loss due to theft or an accident.
Daily allowance cover
If your car is damaged due to an accident and requires repairs, it can take several days or weeks to complete. During this time, you may have to rely on alternative modes of transportation, such as public transport or a rental car. The daily allowance cover provides you with a fixed amount of money per day to cover these transportation costs.
Personal accident cover
Suppose the insured car driver or any passengers in the car are injured or killed in an accident. In that case, the PA cover compensates for medical costs, hospitalisation expenses, and loss of income due to disability or death. The amount of compensation depends on the level of injury or disability.
Tips for picking the right add-ons
When choosing the perfect add-ons for your car insurance policy, it is crucial to carefully assess your needs and budget. Here are a few suggestions that may help:
- Evaluate your requirements: Before selecting any add-ons, assess your driving habits, your vehicle’s condition, and your budget. Evaluate various risks your vehicle is exposed to and choose the add-ons that protect you the most.
- Compare and research: Research various insurance providers and their add-on packages. Compare the prices, features, and benefits to get the best deal. Read online reviews and seek advice from friends or family who may have experience with similar add-ons.
- Consider the deductible: Check to see if the add-on package is deductible. If it does, consider the amount of the deductible and the overall cost of the add-on before making a decision.
- Opt for comprehensive coverage: Opt for comprehensive coverage if it fits your budget. It offers maximum protection and covers damages caused by natural disasters, theft, and other unforeseen events.
- Review the policy regularly: Review your policy periodically and assess if the add-ons are still relevant to your needs. You can remove or add add-ons based on your changing requirements.
Final Words
As detailed in the previous section, we have explored various add-ons for car insurance policies and the potential benefits they offer to different car owners. Nevertheless, if you are still trying to decide which add-ons to purchase, remember that the crucial factor in selecting the appropriate add-ons in car insurance online is identifying your specific requirements.
