Car insurance: Add-on covers help protect your car better

When buying a motor insurance policy, one must look for a comprehensive policy with add-on cover such as zero depreciation, engine cover, vehicle replacement, roadside assistance and towing etc. These optional add-on covers will cover elements that are excluded from the policy.

Extensive cover

A comprehensive motor insurance will cover your own losses as well as compulsory third party insurance. Third-party insurance only covers damage to other vehicles or property and people by one’s insured vehicle and the rates are fixed by the Insurance Regulatory and Development Authority of India (Irdai). A comprehensive insurance cover will cover vehicle damage due to accident and accidental death or disability of the insured car owner-co-driver. If the car is stolen, the insurer will pay the full insured declared value (IDV) of the car. Insurers fix the car’s IDV every year at the time of policy renewal, the year of manufacture, the selling price of the brand and the model and depreciation of the car. A comprehensive car insurance will cover losses due to natural disasters, fires and vandalism.

Add-on cover

An individual must choose an add-on cover with a comprehensive car insurance policy. Zero depreciation cover is the most popular add-on cover where policyholders get full claim for the price of parts like plastic items, fiber, rubber, windscreen etc. due to accident. Most insurers offer zero depreciation riders for the first five years with additional premiums.

In fact, every year the price of a car drops and falls. Depreciation ranges from zero to 5% in six months to 50% for vehicles over 10 years. In addition, in the event of an accident, the insurer pays for the replacement of the parts after deducting the depreciation and the policyholder has to pay for the difference between the price of the new part and the depreciated price. In the case of a zero depreciation add-on cover, the insurer will pay the full amount of the damaged parts.
An engine add-on cover will protect the car’s engine in the event of a flood because hydro-static lock is a major cause of engine failure. This add-on cover will help the policyholder to get compensation for the cost of electrical failure of the engine due to water intrusion. Returning the invoice add-on cover will help the insured to get the full invoice value of your vehicle if it is damaged (complete loss) due to accident or theft. Under the Break-Down Support Add-on Cover, insured will receive roadside assistance and towing benefits. Add-on covers aren’t expensive and it’s best to go for a few of them to protect your expensive car.