The insured is the first party, the insurance company is known as the second party, while others form the third party. Primarily, there are three types of motor insurance policies – Third Party and standalone Own Damage & Comprehensive. A third-party cover provides protection to insured against any liability arising due to death &/or injury &/or damage caused to third parties. Standalone Own damage cover protects car owners against any liabilities occurring from damage to their own vehicle. Comprehensive cover protects the car owner from damage to vehicle & liabilities arising from third parties.
But considering the evolving needs of cars, today car owners need comprehensive protection for their vehicles to enjoy driving without worrying about financial loss. Add-on covers are designed to enhance overall motor insurance and give comprehensive coverage for damage or loss of car keys, tyres and rim, repair or replacement of consumable items and so on.
Types of add-on covers under car insurance
A comprehensive motor insurance policy ensures the highest level of protection and can be amplified with the help of add-on covers. Some of them include:
- Zero Depreciation Cover: At the time of claim settlement, the insurer deducts the amount of depreciation that applies to a vehicle parts under replacement from the claim value. A ‘Zero Depreciation’ cover can relieve car owners from the stress of incurring the depreciation cost, allowing them to get an appropriate claim.
- Engine Protection Cover: Despite being one of the most important parts of the car, regular comprehensive policies do not cover non-accidental damages to the engine. With an ‘Engine Protection’ cover, one can protect her car from financial loss due to damage to the engine or gearbox, caused due to water ingression or due to lubricating oil leakage.
- Return to Invoice Cover: A car’s value starts to depreciate, the moment it leaves the showroom. While buying car insurance, the Insured Declared Value or IDV is decided on the basis of market value and not at the price at which it was purchased. With a ‘Return to Invoice’ add-on cover, car owners can claim the invoice value of their cars in the event of loss or theft of the car. Further, the cost of road tax & registration paid during the new vehicle purchase along with the insurance cost is also reimbursed.
- No Claim Bonus Protection Cover: No Claim Bonus (NCB) is one of the most beneficial add-on cover. NCB is a discount in premium offered by insurance companies if a vehicle owner has not made a single own damage claim during the term of the motor insurance policy. No Claim Bonus Protection Cover helps in protecting the NCB discount even in the event of a claim (one) during a policy year. A ‘NCB Protection’ add-on can help keep the premiums low despite making a claim.
- Key and Lock Replacement Cover: It provides for the cost of new locks and replacement keys, in the case of irrevocable loss. A regular policy does not pay for the replacement of keys, thus making this add-on a must.
- Consumables Cover: The cost of consumable items like nuts and bolts, lubricants, grease, etc. are not included in regular policies. With an add-on cover, you can reimburse the expenses towards consumable items used in an insured car during repairs caused due to an accident.
- Daily Allowance Cover: The ‘Daily Allowance’ Cover helps a car owner bear the daily expenses on travel incurred during repair of the insured car. This may be applicable only if the car is being repaired at the network garage of the motor insurance company.
Having add-ons can give complete protection to a car. Therefore, paying attention to the features while comparing the premiums is imperative. Most comprehensive policies do not cover the damages offered by add-on covers. To be able to enjoy the extended benefits of motor insurance, car owners should carefully choose a car policy and select add-ons as per their requirements. Some of these add-on covers may seem trivial but are important to have for the financial security of the car.
With the ever-increasing number of cars on Indian roads, these add-ons have become crucial. India leads the world in road accidents, and any accident, dent or damage, can occur in the blink of an eye, leaving a deep hole in your pockets. It is thus advisable to maximize motor insurance coverage with add-on covers as per the requirements.