It is mandatory to have car insurance in India. According to the Motor Vehicles Act, 1988, all motor vehicles need to at least have a third-party liability cover. While this covers financial losses arising from damages or losses to third-party property and/or person(s) due to an accident or a mishap, it does not provide any protection against damage to the policyholder’s property or self. Hence, a comprehensive policy is preferred by car owners looking for complete protection. Most insurance companies offer standardized comprehensive policies with similar features. However, every car owner has different insurance requirements. Hence, to allow them to customize the policy as per their needs, insurers offer a range of add-ons.
When you buy car insurance online, after asking you to choose the type of policy (third-party, own-damage, or comprehensive), the insurance company will ask you to choose the add-ons. This needs to be done carefully since each add-on adds to the overall premium of the plan. Today, we will talk about some popular add-ons available with car insurance to help you understand them and choose the ones you need.
Popular Add-ons You can Buy with Your Car Insurance Policy in India
1. Zero Depreciation Cover
This is one of the most popular add-on covers and is highly recommended for new cars. A car is a depreciating asset and loses value with every passing day since its parts go through wear and tear. Hence, when an insurer settles a claim for repairs to your car due to an accident, he does not reimburse the entire amount. Instead, he deducts some amount towards depreciation (wear and tear) and reimburses the rest. Based on the make, model, and age of the car, this can go up to 50% of the claim amount. A zero depreciation cover ensures that the insurer reimburses the entire claim amount without factoring in depreciation.
2. Return to Invoice
When you buy a car, apart from the value of the car, you also pay registration and road tax. However, when you insure it, the insurance company considers the value of the car alone. The Return to Invoice add-on ensures that the policyholder gets the ‘invoice value’ of the car if it is stolen or damaged beyond repair. It is important to note that this add-on cannot be used to claim repairs or small damages.
3. Emergency Roadside Assistance
If you use your car for a lot of outstation trips through rural areas or highways that don’t have many garages nearby and your car breaks down, then you can get stuck in the middle of nowhere until help arrives. Also, you will have to get in touch with different service providers for different things like towing, mechanics, etc. With an emergency roadside assistance cover, the insurer provides all these services under one umbrella for a reasonable premium.
4. No Claim Bonus Protection Cover
All insurers offer a No Claim Bonus (NCB) to policyholders. This bonus is available to you if you don’t file a single claim during a policy tenure. It is the insurer’s way of acknowledging that you are a safe and responsible vehicle owner. This bonus is extended in the form of a discount on the premium at the time of renewing your policy. This is a progressive discount and increases for every subsequent year that you don’t file a claim and can go up to 50%. However, if you file a single claim, then the NCB resets.
To protect this, you can purchase a No Claim Bonus protection add-on that allows you to file one own-damage claim in a policy tenure without affecting the accumulated NCB. It is important to note that this claim cannot be a total loss claim.
5. Consumables Cover
If your car meets with an accident or a collision and needs to undergo repairs, the insurance company will exclude the cost of consumables like gearbox oil, engine oil, oil filter, grease, brake oil, air conditioner gas, washers, bearing, clip and items of similar nature, excluding fuel. With a consumables cover, these costs will be covered provided the vehicle is repaired at an authorized garage.
6. Engine Protection Cover
Let’s say that you live in a low-lying area in a city that receives heavy rainfall every year. Hence, water logging is a common problem that you battle. Once water enters the engine, it can damage it severely and induce a hydrostatic lock. With an engine protection cover, you can receive reimbursement for such damages and also damages due to the leakage of lubricating oil and damage to the gearbox.
While the add-ons come at a price, they can help you save a lot of money in the long-run. However, it is important to ensure that you choose the add-ons carefully. Assess the make and model of your car along with your usage patterns. This can help you determine the kind of coverage you need and customize policy before you buy car insurance online in India. Research your options and look for detailed online car insurance quotes before making a decision. Good Luck!