Add-ons Covers for Car Insurance policy

With the increasing number of road accidents and deteriorating condition of roads, car insurance becomes a necessity for every car owner and driver. A car insurance policy doesn’t only save you from the financial and legal liability against the miss happenings on the road, but saves your money for car repair and service also. But a simple car insurance policy isn’t enough for the current era. And that’s why add-on covers for car insurance becomes important to widen your area of coverage and to give you a 360 degree protection.

So let’s go through the various aspects of add-on covers for car insurance policy through this article, so that you can get the maximum benefit from your car insurance policy

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. It helps you to make your car insurance policy work a lot better for you and you can save a huge amount of money by adding required add-ons to your policy. 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)

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.

9. Loss of personal belonging

Loss of personal belongings (like a laptop or electronic equipment) from a locked vehicle due to theft or apparent loss is covered under the loss of personal belonging add on cover.

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 policy.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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