Private Car Insurance Add-ons

What are Car Insurance Add-On Covers?
Under car insurance, an add-on cover is referred to as an additional cover that can be purchased by a car owner to strengthen the coverage level of his/ her car. It helps a car owner to enhance the financial security of a car over and above the standard policy coverage. Thus, it provides extended coverage to the insured four wheeler under a car insurance policy. A car insurance add-on is an additional cover that can be opted for by the insured with a comprehensive car insurance policy to ensure better coverage and protection provided under the insurance policy.

Since add-on covers provide additional coverage to an insured’s vehicle, it comes at an additional cost over and above the basic Own Damage (OD) and Third Party (TP) premium and hence, car insurance premiums increase on buying add-on covers. Car insurance add-on covers are only available under comprehensive car insurance or standalone own damage car insurance plans. It is not available under a third party car insurance policy. There are multiple add-ons that can be opted for with a comprehensive car insurance policy. Some of the more popular ones are :
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Zero Depreciation cover
Zero Depreciation cover is an add-on cover that shares the burden of depreciation on the car’s parts and enables a car owner to get a higher claim amount. A motor insurance company accounts for depreciation on the parts of the car and deduct it from the IDV of the car. It ensures that depreciation is not considered while paying the claim amount at the time of claim settlement. Also known as Nil Depreciation or Bumper-to-Bumper car insurance, this add-on cover is mostly available for cars up to five years old (seven years with some insurers).Some insurers may permit up to two zero depreciation claims in a policy year while some allow unlimited claims.

Roadside Assistance (RSA)
Roadside Assistance Cover provides the car owner with on-road assistance services in case the insured car breaks down while driving anywhere across India. Finding a mechanic nearby could be tedious or even impossible in a remote location and any repair work may be quite expensive or not done as per garage standards. In such situations, a ‘Roadside Assistance’ add-on cover can be useful. Just a call to the insurance company and a mechanic is arranged to inspect the vehicle and help repair the same on the spot. Some of the assistance services available under this add-on cover are car towing, changing a flat tyre, fuel delivery, the arrangement of replacement car keys, battery jumpstart, minor on-site repairs, etc.

Engine Protection cover
The engine is the heart of a car. But sadly, any non-accidental damages to the engine of the car is not covered under a regular comprehensive car insurance policy. Engine Protection covers any loss or damages caused to the engine of the car due to water ingression, oil spill, leakage of lubricating oil, electrical or mechanical breakdown of the engine, etc. It also provides financial aid for the replacement of the car’s engine or its parts. But just like the zero depreciation cover, the engine protection cover is normally available only to cars that are not more than five years old.

Tyre Protection Cover
A comprehensive car insurance policy does not pay for any damages or loss of the tyres if it is not arising out of an accident. Tyre Protect cover reimburses any expenses incurred towards the repair or replacement of the tyres of the insured’s car. It ensures that the motor insurance company pays for tyre damages, such as puncture, in-tyre bulge, tyre cut, bursting of the tyre, etc.

Return to Invoice cover (RTI)
The Return-to-Invoice cover enables a car owner to receive the invoice value of a car as the claim amount in the event of a total loss, constructive total loss or theft of the car during the insurance policy period. This ensures that in case of theft or total loss you get the ex-showroom price of your car as a compensation and not just the IDV or market value. When buying car insurance, the IDV is estimated by considering the market value of the car that will be lower than the price at which the car was purchased. As a result, the car owner will not receive the invoice value of the car even if the vehicle suffers from a total loss or gets stolen. With this add-on cover, the IDV of a car is fixed equal to the price at which the car was originally purchased. Note that RTI cover is available only for cars that are less than three or five years old, depending on the insurance company.

Key Replacement Cover
Key Replacement cover is an add-on cover that provides coverage for expenses incurred by the insured on account of replacement of the keys of the insured car. This coverage also covers the cost incurred for the repair of the lock-set of the car in case the keys have been lost, stolen or damaged. Moreover, if the insured car has an electronic key, obtaining a new key or getting it replaced can get expensive. Also a regular car insurance policy does not pay for the replacement of car keys.

Consumables Cover
Consumable cover is an add-on cover that reimburses the expenses incurred towards consumables items used during repairs of the insured vehicle. These consumable items may include, nuts & bolts, lubricants, grease, washers, engine oil, brake oil, screw, oil filter, bearing, etc. The cost of such consumable items is not usually covered under a comprehensive car insurance policy. It provides coverage for all the consumable items used while the car was being repaired. This add-on cover is not available for cars older than five years.

No Claim Bonus Protection Cover
No-claim bonus (NCB) is a discount in premium offered by insurance companies if a vehicle owner has not made a single claim during the term of the motor insurance policy, which means it is like a reward to the vehicle owner for prudent use of the vehicle. No Claim Bonus (NCB) is one of the most beneficial features available under a car insurance plan. NCB enables car owners to save at least 20% upto a maximum of 50% in a span of five years. But the moment an insurance claim is filed, the NCB reverts to 0% irrespective of the value of the claim. A No Claim Bonus Protection cover protects the NCB of a car owner despite raising a claim. It keeps the NCB intact and reduce the renewal premium at the time of renewal even if the car owner raises a claim in the previous policy year. Note that NCB protection cover applies only to own damage component of the overall premium.

Daily Allowance Cover
The Daily Allowance Cover is an add-on cover that provides travel allowance to cover day-to-day travel expenses in case the insured’s car is getting repaired at a garage. It compensates the car owner for any travel expenses incurred while the car was at the garage. However, this add-on cover applies only if the insured car is getting repaired at the network garage of the insurance company.

Loss of Personal Belongings
Many people travel in a car with expensive laptops, smartphones, tablets, jewellery etc. An accident or calamity can damage these expensive gadgets and items beyond repair. Generally, such damages are excluded by standard insurance policies. However, by opting for personal belongings cover by paying a nominal extra premium, you can protect your costly belongings from damages or theft. The Loss of Personal Belongings cover is an add-on cover that compensates for the loss of any personal items stolen from the car or with the car. It also pays for any damages caused to the personal belongings inside the car. In either situation, no compensation is offered by the insurance company for the loss of personal items.

Passenger Cover (for Accidents)
The Passenger cover is an add-on cover that provides coverage for any medical expenses incurred by the passenger/s of the insured car in case of an accident, since the basic PA cover under a regular car insurance policy does not cover the treatment expenses of the passenger. This add-on, covers the cost of hospitalization expenses, treatment expenses as well as ambulance fees. Sometimes, accidents can lead to disability, which prevents a person from carrying out daily tasks. A Passenger Personal Accident cover enables you to protect yourself financially against such situations. In case of a partial or permanent disability due to an accident, the insurer provides a lump-sum to you or your nominee which will help you to cover the loss of income to an extent. As per the latest motor vehicle rules, it is compulsory for all the vehicle owners in India to have a minimum personal accident cover of Rs. 15 lakh to drive on the road.

EMI Protector
Policy covers the Equated Monthly Instalment (herein referred as EMI) payable by the insured to Financial Institution shown in the Policy schedule for the period insured vehicle is in Garage for repair, provided insured vehicle is damaged by a covered peril.

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