The competition in the realm of insurance has increased to such an extent that insurance providers are now offering a plethora of options to spruce up your basic auto insurance policy. These add-on covers are available at additional premiums and can coalesce with your standard insurance policy to provide you the most optimum coverage.
Add-on plans offer coverage for several risks in addition to the third party liability insurance and own damage insurance that a standard policy provides. Based on the make of your car, each add-on cover can eventually save you a lot of money that you would have otherwise paid at the time of claims.
Listed below are some of the most popular add-on covers that you can purchase for your car.
Engine Protect cover
This add-on cover is more relevant to individuals who own luxury cars. The cover is only available for purchase to owners of cars that are not more than three years old. The Engine Protect cover is also called the Machinery Breakdown cover and it compensates for repairs to the engine for damages that are not caused by accidents.
The advantage of purchasing this cover is that it bears the cost of engine repairs that could be very high in the case of luxury cars.
It is also useful for people living in areas that are prone to waterlogging.
It should be noted that this add-on insurance will not cover damages that arise from wear and tear or owner’s negligence.
Zero Depreciation cover
This is clearly the most recommended add-on cover for auto insurance. This cover enables you to claim the entire cost of car repair following an accident, without having to pay any additional amount to the garage. Usually insurance companies reduce a certain amount from your claim before payout, to compensate for the standard depreciation of car parts, i.e., the loss in their value with time. The zero depreciation cover enables you to receive full compensation without deductions for depreciation.
Insurers usually provide the zero depreciation cover only for the first three years after the purchase of the car. As the car ages, the premium for zero depreciation also increases. Under this cover, a maximum of two claims can be made during the policy period.
A No Claim Bonus is given to a policyholder who makes no claims during the policy period. This amount is usually 20% of the premium and it increases annually as long as the subsequent years are also claim-free. Hence, the accumulation of NCB guarantees lower premiums for policyholders in the subsequent years. However, if he files a claim, he will lose the benefit of the accumulated NCB.
The NCB Protect add-on allows a policyholder to retain the NCB even if he has filed a claim. Hence, this helps in preserving the discount on premium for the subsequent year.
This benefit will, however, not be available if the policyholder makes a total loss claim or multiple own damage claims.
To avail the benefit, the policyholder should have accumulated NCB for at least two years.
This cover is not available for cars that are more than three years old.
This add-on cover provides you compensation for hiring an alternative vehicle in the event of a stolen car. The amount that is reimbursed could vary between Rs. 500 and Rs. 1000 per day, and it is dependent on the model of your car. The reimbursement is given out for 10-15 days.
But there could be certain exclusions to this cover. For example, you will not be provided compensation if your vehicle is repaired at an unauthorised garage or if it is under repair at a garage for less than three days.
Roadside Assistance cover
As per this cover, you will be provided certain emergency services like towing, refuelling, flat tyre change and mechanic’s service, round the clock, when you encounter a car breakdown. This add-on insurance cover is offered at a minimal fee by some insurance providers, while others provide it as part of the basic cover. Some insurers extend this add-on cover for renewed policies and do not make it available for new insurance policies.
Return to Invoice cover
This is a cover that can be added to your insurance policy to protect yourself from car theft. A policyholder who is protected by this add-on cover can avail the original value of the car that is inclusive of registration charges and road tax. If he was not protected by this cover, he would have received only the insured declared value (IDV), i.e., the depreciated market value, of the car.
An advantage of adding this cover is that if the same model of car is currently available at a lower price in the market, the original price will be considered by the insurer while making the claim payout.
This cover is useful for drivers who live in theft-prone areas and those who regularly commute long distances on highways at night.
This add-on cover will not be extended to vehicles that are imported.
Only owners of vehicles that are less than 3 years old can purchase this cover.
Accident coverage for passengers
Most insurers offer this add-on cover to policyholders. Under this cover, a lump-sum amount will be paid to the passengers who are insured, if they suffer total or partial disabilities that are permanent in nature. Relatives of insured who lose their lives can also benefit monetarily from this cover. Usually the sum assured under this cover is Rs. 1 lakh per person, but this is subject to variations between insurers.
If your car has met with an accident and you have spent a considerable amount of money on the purchase of nuts and bolts, engine oil, screen washers, bearings, etc., you can avail compensation for this spend as long as you are protected under this add-on cover. The cost of such consumables are not included under a standard auto insurance policy. Usually, insurers do not provide this cover for vehicles that are older than 3 years.
Key Replacement Compensation
This add-on cover protects you from stolen or misplaced car keys. As per the policy, the insurance provider compensates you for charges that were borne by you for the lock and key replacement.
Personal Accident cover
This cover protects both the owner of the vehicle and the paid driver. If the owner driver is involved in an accident and if there has been a critical damage to his limbs or if he has succumbed to death, he will be paid 100% of the claim amount. This cover, however, is not valid in case the owner does not hold a driving license. If an owner has multiple vehicles, then the personal accident cover add-on is available only for one vehicle.
Loss of Personal Belongings
Policyholders will be benefitted by this add-on cover if there was a theft of personal items such as electronic equipments, laptop, etc. from their locked car.
If the insured is hospitalised following an accident, this cover provides a lump sum amount on a daily basis, to compensate for the hospitalisation charges. The amount that is paid daily and the number of days it is offered varies between insurance providers.
These add-on covers can be conveniently added to your insurance policy, through the websites of the insurer or via neutral third-party financial websites. While selecting the add-on covers you should focus on your requirements and make a prudent decision at the end.