Car Insurance Add-on Covers
Add-on covers are usually offered by insurance companies to enhance the benefits and protection of your existing insurance policy. It acts as a cushion to offer you additional security and lofty benefits. Buying a car insurance plan, often cannot provide you with enough security and cover for your precious car or motor. As a car or two-wheeler is very close to your heart, you need to protect it at any cost just like your family. For that, car insurance add-on covers safeguard always there to serve your purposes as it can offer you a sack full of benefits and facilities, such as roadside assistance, key replacement, loss of license or registration certificate cover, and many more.
You can also opt for multiple add-on covers with your existing car insurance plan to make it more comprehensive and to keep your car more protected and secure than ever. Car insurance add-on covers are only available with comprehensive car insurance or standalone own-damage car insurance plan. If you have only a third party liability car insurance plan, you cannot avail of add-on covers under that plan because a third party plan always deals with injuries, loss, or damages incurred to the third party, and it does not provide any coverage for your damages of the car or the owner-driver.
Importance of Add-ons Covers in Car Insurance
Car insurance add-on covers play a pivotal role as it comes with a bundle of benefits and facilities ranging from zero depreciation cover, consumable cover to engine protection, and many more. To know about its importance in detail, have a look at the below mentions.
Financial protection – A comprehensive standard car insurance policy cannot always offer you and your car enough protection. So, if anything happened to your car which’s repairing cost is not covered by your existing car policy, that can pose a real financial burden on your shoulder. In that case, add-on covers always act as a financial cushion for you.
Additional benefits – There are numerous add-on covers available in the car insurance market. It is designed keeping in mind your needs. Add-on covers always help you to get some extra benefits and facilities to keep your car protected and safe.
Enhanced security – A standard car insurance plan may not be sufficient for your precious car. There are many clauses and situations that are not covered under a standard car insurance plan. So add-on covers help you to grab those extra safety features for your car.
Protection to your family – There are certain car insurance add-on covers that also offer coverage to your family while they are traveling in the insured vehicle and meet with an accident. Apart from that, few companies also offer child education fees under certain circumstances. So in a way, the add-on covers not only keep you safe but also look after your family.
Peace of mind – When you have opted for add-on covers, you know that your car is protected and you are not going to face any financial crisis in case of any unfortunate, troublesome situation. This will provide you with peace of mind and tension-free drives.
List of Car Insurance Add-on Covers
There are lots of car insurance add-on covers available in the market. Here is a list of those add-on covers. Have a look at them and choose according to your convenience.
This add-on cover is also known as bumper-to-bumper car insurance or nil depreciation. With time, as your car ages, your motor insurance company will be counting your car’s depreciation value which is primarily based on the parts of the car. This value will be deducted from the IDV of your car. If you file a claim, you have to pay this depreciation value as the insurer will deduct this amount while paying for your claim.
But if you opt for the zero depreciation add-on cover, it will cover the depreciation value of your car’s body parts and will release you from the financial burden. In this way, you will also be eligible to get a higher claim amount. The Sum Insured for the add-on will be the difference between the IDV and the Manufacturers’ Selling Price of the vehicle as supported by the invoice of the original purchase issued to you by the dealer.
Your car starts to suffer depreciation, the moment you have purchased it and it leaves the showroom. And as time passes by, your car undergoes aging, it will lose its value more. Keeping in mind the market value of the car and the purchase price of it, the IDV value is calculated. For this, you are never going to get the invoice value of the car, under any circumstances.
But if you opt for the return to invoice value add-on cover, the IDV of your car will be fixed equal to the purchase price of the car. However, if you file a claim for Total Loss /Constructive Total Loss due to an accident or theft and not being recovered, the insurer will pay the lowest of the On Road Price of the vehicle at the time of original purchase or the IDV. Always remember that this add-on cover can only be purchased if your car is not more than 3 years or 5 years old, depending on the terms and conditions of the company.
No standard car insurance policy offers protection for the non-accidental damages to the engine. Keeping in mind, the importance of the engine for a car, an engine protection add-on cover has been designed that provides coverage for any kind of loss or damages incurred to your car engine. This damage can be occurred due to a number of conditions such as water ingression, oil spill, mechanical breakdown, electrical problems, and so on.
Not only this, under this add-on cover, you can also get the expenses that have been incurred to you due to the replacement or repair of your engine or parts of it. However, this add-on cover is only available for cars, which are not more than 5 years old.
Consumables mean those parts and things that are used while a car is being repaired, such as bolts, nuts, screws, lubricants, grease, oil, washers, oil filter, bearing, etc. Usually, the cost of these consumables is not covered by a standard car insurance policy, the insured person has to bear the cost. But if you opt for consumables add-on cover, all the expenses incurred due to the usage of the consumable items while repairing a car are compensated by the insurer. This enables you to get a higher claim amount. Like the previous one, this add-on cover is also not available for cars that are more than 5 years old.
No Claim Bonus (NCB) is paid to the insured person if he/she does not file any claim in the previous policy year. With the help of NCB, the insured person can save a minimum of 20% that is subject to a maximum limit of 50%. But once the claim is raised, the NCB value will get back to zero no matter how big or small the amount is.
You can escape this situation if you opt for no claim bonus protection add-on cover that will make you eligible to keep your NCB as it is, even if you file a claim. This helps the insured car owner to minimize the premium amount that he has to pay for his existing car policy. This has to be remembered that this NCB add-on cover is only applicable for the own damage premium.
Being a machine, a car can stop working in the middle of the road keep you stranded over there. In this situation, it becomes very difficult to find a mechanic and the repairing work may prove to be very expensive in that emergency situation. To relieve you in this situation, the roadside assistance add-on cover has been designed that can offer you multiple services including emergency towing assistance in case of break-down and accident, repairs on the spot including battery failures, flat type service, vehicle key service, emergency fuel delivery, cab service, pick up of the car in case of driver disability, shipment of spares and some more. Not only that it can arrange for a mechanic for you and also can offer you accommodation at the nearest point available that is subject to the availability.
Daily cash allowance benefit
If your car is in the garage for repair and you do not have another car, you may need to take cabs or other transportation services, which may create an unnecessary financial burden on you. Under this situation, the daily cash allowance benefit add-on cover comes as a rescue as it enables you to get day-to-day travel expenses while your car is in the garage for repair. This facility is only available when you avail of the network garage facility of the insurance company for the repair work. But the application of this add-on cover is subject to the terms and conditions of the company. Some of the insurers offer this daily cash allowance benefit only if your car is at the network garage for consecutive certain days as per the policy rule.
A small thing like a key can easily be lost or stolen and without a key, a car cannot function. More than that, if your car is an electric one, getting the replacement for the lost key may prove to be quite expensive. Keeping in mind the vulnerability and importance of the car key, this add-on cover has been designed to offer you compensation for the expenses incurred due to the replacement of the key of an insured car. Not only this, in case of the car key are lost, damaged, or stolen, it also covers the expenses arising out of the repair of the lock-set of the car.
When a car is on the road, it is exposed to many dangers including an accident that can not only damage the car but also can harm the driver as well as the passengers. Though a standard car insurance policy offers personal accident cover, that does not cover the passengers in it. In that case, the passenger assistance add-on cover comes as a messiah as it offers compensation for medical treatments of the passengers of the insured car when they meet any accident. Apart from this, this add-on cover also enables the passengers to get reimbursement in case of death or disability of the passenger arising out of an accident up to a certain amount as per the company rules.
It is needless to talk about the importance of the tyres for a car. But unfortunately, a comprehensive standard car insurance policy does not provide any coverage for the repair or loss of the tyre unless and until the expenses are arising out of an accident. To overcome this situation, you can opt for the tyre damage add-on cover that compensates for the repair or replacement of the tyre of the insured car even if it has not met any accident. This add-on cover includes tyre punctures, in-tyre bulge, tyre cut, bursting of tyre, flat tyre, and so on.
Loss of personal belongings add-on cover
When you leave your car unattended, the personal belongings of yours that you have left in the car can be stolen or lost. But your car insurance company does not offer any compensation for those lost or stolen personal items. But if you go for this loss of personal belongings add-on cover, it ensures that the insurer needs to pay for your stolen or lost personal items such as baggage, bags, clothes, etc. it also pays for the damage to these items incurred due to any peril as insured under the car insurance policy. Some of the companies also include mobiles, laptops, jewelry, watches, etc. though it is subject to the terms and conditions of the insurer.
GAP value add-on cover
In case of theft, total loss, or constructive total loss of your car, this add-on cover helps you get the complete invoice price of the vehicle. Moreover, it also covers the Road Tax and first-time registration charges against an additional premium.
Loss of driving license or registration certificate cover
Registration certificate of your car and the driving license are the most important things that you need to keep with you. Loss of any of these can prove to be fatal and may also land you in problematic situations including financial loss. This add-on cover helps you to obtain a duplicate registration certificate or driving license and the expenses incurred due to this will be borne by this cover. But in this case, filing a report to the police or the concerned authority and obtaining the report is mandatory.
Additional Accidental Injury Compensation cover for owner-driver
If you obtain this add-on cover, you will be covered against the risks of assault or any other accidental injury that leads to Death/Permanent Total Disability in any accident when you are traveling in the insured vehicle. Even if you have a Personal Accident cover for Owner Driver, you can purchase it and it will work as an extra cushion towards your safety.
Accidental hospitalization covers for family
Protecting your family is as important as protecting your car. But unfortunately, a standard car insurance policy does not provide coverage for the family members while they are traveling in the insured car and have met with an accident. Opting for this add-on cover will save you and protect your family in this situation. Your named family members whilst traveling in the insured car will be covered against the risks of assault or any other bodily injury that leads to Death/Permanent total/Permanent Partial disability in any accident involving the car. The percentage of the benefit will be as per the policy wordings of the insurer.
Child education support add-on cover
As a car is always exposed to different types of perils, you may meet an accident that can lead to unfortunate and untimely death or total permanent disability. In either of the situations, your child’s education may get hampered. To eradicate this stress, you can opt for this add-on cover that will ensure that the insurer will pay for the education fee of the named child/children in the case the owner of the insured car meets with accidental death or permanent total disability. To avail of this cover, the child/children should be dependent on the insured person and there is a certain age limit for the child that may vary from one insurer to another.
Electrical and Mechanical Breakdown add-on cover
Even without meeting an accident, the electrical and mechanical equipment of your car may get damaged. Repair of such items may be proven expensive and more than that, these expenses are covered by a standard car insurance plan. But if you opt for this add-on cover, it will compensate you for the cost of repair of specified electrical and mechanical equipment of your car, even if it has not met any accident, under certain circumstances. For most of the companies, to avail of this add-on cover, the age of the car should not be more than 3 or 5 years.
Frequently Asked Questions
It totally depends on the insurance company. Usually, car insurance companies offer zero depreciation add-on cover for cars up to 5 years old. Some of the insurers also allow up to two zero depreciation claims whereas some may allow unlimited claims.
The (Insured’s Declared Value) IDV calculator is a kind of online tool that helps to determine the market value of your car and also approximate the premium value that you would be paying for tour car insurance. Vehicle type, age of the car, model number, purchase years, etc. are the factors while calculating the IDV of a car.
No, as the third party part of the total premium is decided by IRDA or Insurance Regulatory and Development Authority of India and it cannot be changed. Hence NCB protection cover not applicable.
For availing of any of the add-on covers, it is mandatory to maintain your car regularly as per manufacturer guidelines.
It helps to protect the car owners against losses that can arise when the amount of compensation received from a total loss does not fully cover the amount the insured owes on the vehicle’s financing or lease agreement. This situation arises when the balance owed on a car loan is greater than the book value of the vehicle.
For example, suppose Mr. Joshi’s car, which is worth Rs. 20 lakhs. However, he still owes a total of Rs. 22 lakhs worth of car payments. If his car is completely written off as a result of an accident or theft, Mr. Joshi’s car insurance policy will reimburse him with Rs. 20 lakhs. Because Mr. Joshi owes the car financing company Rs. 20 lakhs, however, he will still be Rs. 2 lakhs short, even though he no longer has a car. But if he purchases this GAP add-on cover, it would cover the Rs. 2 lakhs “gap,” or the difference between the money received from reimbursement and the amount still owed on the car.
No add-on cover will be applicable if you have parked your car in the non-parking zone or prohibited area or illegally.