Car insurance policies cover financial and legal liabilities depending on the extent of coverage. Hence, as per the Motor Vehicles Act, 1988, individuals must have at least a third-party car insurance policy to offer protection in case of damages caused to a third party person, vehicle or property. Several insurance companies in India offer a range of attractive deals on insurance plans. Additionally, individuals can easily get car insurance online after comparing multiple insurers and assessing the policy terms in a hassle-free manner.
Among the two major types of car insurance policies – third-party and comprehensive, the latter provides extensive coverage benefits against both third-party and own car damages. Moreover, one can amplify the benefits under a comprehensive insurance plan for car on finance against additional expenses by availing of add-on covers for customisation
What are add-on covers in a car insurance policy?
An add-on cover is an additional layer of protection over and above a base comprehensive insurance plan. It helps in enhancing the financial security of a car by providing extended coverage to the insured. There are several add-on policies tailor-made to an insured person’s needs. Individuals will get the benefit of only those add-on covers they pay for.
What are the top 5 add-ons to include in your car insurance policy?
Generally, insurance providers offer several add-on covers to individuals purchasing comprehensive insurance plans. By paying an additional premium amount, one can benefit from any of these add-ons. Nevertheless, before buying an add-on cover, policyholders should know every detail of the said covers and customise their plan accordingly.
Here is a short description of the 5 most essential add-on covers:
- Zero depreciation cover
With each passing day, a car’s value depreciates. An insurer deducts this depreciation from a car’s Insured Declared Value (IDV). Therefore, an insurance provider settles claims keeping in mind the applicable depreciation on the car parts. By availing of a zero depreciation car insurance cover, one can cover the depreciation and get a higher claim amount.
This add-on is generally ideal for cars that are less than 5 years old.
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- Breakdown assistance
A breakdown assistance add-on cover provides a car owner with on-road assistance during car breakdowns. Some assistance services included in this cover are:
- Changing flat tyres
- Minor repairs
- Car towing
- Fuel delivery
- Arrangement of replacement car keys
- Battery jump-start
During unfortunate scenarios, this add-on cover can eliminate the need for finding a mechanic who will conduct necessary repairs. Additionally, it curtails expenses that may be a burden otherwise.
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- Return to invoice
While purchasing car insurance policies, an insurer estimates a car’s Insured Declared Value (IDV) by considering the current market value. Generally, this value depreciates compared to the original purchase price. Consequently, a car owner will not receive a car’s invoice value even if it suffers from a total loss.
Nevertheless, one can obtain this invoice amount during claim settlement with the help of a return to invoice cover included in the comprehensive plan. Thanks to this add-on cover, a policyholder can receive a car’s invoice value in case of total or partial loss of a vehicle or in cases of theft. This cover makes the IDV of a car equal to the original price, inclusive of the ex-showroom price plus the road tax.
- Consumable cover
Consumable items like grease, nuts and bolts, lubricants, engine oil, screws, brake oil etc., are used while repairing a car. The costs of these items are generally not included in a comprehensive insurance plan. Bearing these costs can increase an individual’s financial liability.
Even when a person faces a situation such as an accident, a comprehensive insurance plan that is mostly suggested by the Houston personal injury lawyer, might cover some parts but not for the entire damage. Whereas buying a consumable add-on cover would take care of the cost of consumable items.
Thus, a consumable add-on cover essentially provides coverage benefits against these expenses. Hence, policyholders can save costs of consumables by purchasing this add-on.
- Engine and gearbox protection cover
During accidents or any other unfortunate events, a car’s engine or its parts can incur severe damages resulting in exorbitant repair or replacement costs. To that end, one can get an engine and gearbox protection cover against additional charges over and above a standard insurance policy.
Additionally, in case of engine damages from water ingression, leaking lubricant oil, damaging hydrostatic locks etc., this cover can be beneficial. It also covers damages caused to engine parts like gearbox, crankshaft, pistons, etc.
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To conclude, add-on covers, as mentioned above, can provide well-rounded protection to a car. Regardless, one should consider knowing about these policies in detail before making a purchase.
