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What is Additional Coverage in Car Insurance

By Vikas Chandra Das
21 July 2022, 11:46 AM

A brand-new car is a treasured possession. No amount of caution can suffice to keep it running. Therefore, a choice of policy must be based on careful consideration of the terms and conditions of the policy and a good amount of effort must be made to customise the policy to suit the needs of the insured. The Add-ons will offer the insured an opportunity to do just that!

What are Add-ons?

Additional options or add-ons refers to extended coverage offered by the insurer in the car insurance policy. These add-ons generally cover the insured person for scenarios that may not be included in the original policy. For example, an engine protection add-on can be availed by someone who lives in an area that’s prone to heavy rains and floods. This way, if the engine is damaged, the insurance company will pay for the repairs.  Thus, choosing the right add-on can save the insured a lot of money.

Some basic features of add-ons are –

  • The add-on needn’t be purchased at the time of purchase of the policy – it can be purchased based on the requirement.
  • These covers are available only in the case of comprehensive car insurance policies and own damage policies.
  • Purchasing an add-on must be premised on the driving experience of the insured.

What are the Different Add-ons You Can Get for Car Insurance?

1. Zero depreciation

This add-on entitles the insured to claim the entire cost of replacing the damaged parts of the car. It ensures that the wear and tear costs are not deducted while making the final settlement. It is valid for a period of 5 years from the date of the purchase of the car. There exists a maximum limit of 2 claims for the policy period. 

Below is a table showing the depreciation rates of a car that will be deducted by the insurance company from your final claim settlement amount if you do not have this add-on cover.

Age of the CarDepreciation %
6 months and below5%
6 months to 1 year15%
1 year to 2 years20%
2 years to 3 years30%
3 years to 4 years40%
4 years to 5 years50%

2. Engine protect

The ‘engine protect’ or the ‘engine secure’ add-on is a must-have for owners of new cars, especially if they are expensive, high-end cars. It is generally opted for by those living in flood-prone areas where waterlogging is a common phenomenon. This add-on provides compensation for even those upkeeps/ repairs in the engine that are not particularly related to the accident.

3. Return to invoice

This additional option closes the gap that exists between the Insured Declared Value (IDV) and the invoice value. The entire cost of the vehicle including the on-road taxes can be recovered by the insured in circumstances where the car was lost, stolen or damaged. This add-on will come forth as a boon in case of a total loss, where the car is so severely damaged that the cost of repairing the car would be higher than the resale value of the car. However, it cannot be used for minor damages to the car. As with most other add-ons, this can be purchased only if the car is less than 3 years old.

4. NCB protect

A No Claim Bonus is a benefit that the insured gets when he/she does not submit any insurance claims for the terms rendering them eligible for a discount on the premium when the policy is renewed. Each unclaimed year guarantees an increase in the quantum of NCB from the insurer, with a maximum limit of 50%. 

NCB discounts for consecutive claim-free years are as follows:

Number of Claim-free YearsNCB Discount Offered
1 Year20%
2 Years25%
3 Years35%
4 Years45%
5 Years50%

The role of the NCB protect is to safeguard the earned NCB even after a claim. The way it seeks to do this is –

  • It protects the already earned NCB;
  • The insured will be eligible for the continuation of the slab that he/she was at prior to making the claim;
  • The NCB will not be disturbed for the first two claims during the policy term.

Let's take a look at the table below to understand the NCB calculation:

CalculationWith NCB CoverWithout NCB Cover
Claim Raised After 3 Years35% (accumulated NCB till 3 years)

35% (accumulated NCB till 3 years)


NCB Status (Balance)35%    0 

This add-on is not available if the automobile is older than 3 years. Also, in case of theft of the insured vehicle, the insured has the option of transferring the NCB to a new vehicle, provided that this entire process of purchase and insuring of the new vehicle is complete within a period of 90 days from the date of theft of the car.

5. Roadside Assistance

The road assistance cover is an add-on that guarantees services such as emergency services, towing, refuelling, resolving technical issues, change of flat tyres etc., round the clock. The insurance company sends the concerned person to the site where the assistance is needed and goes a step further to offer emergency accommodation and allied utility benefits if the insured is stranded in a desolate location with no alternate arrangements in place.

6. Accidental Coverage for Passengers

Standard policies offer financial assistance to cover the injuries caused to the driver of the vehicle. This add-on safeguards the interests of the passengers in the vehicle by providing for the cost of medical treatment, disability liability and financial assistance in case of death during an accident. The scale of compensation depends on the nature of the injury. 

For example, death and permanent disability would lead the insurer to pay 100% compensation, whereas, loss of one eye or limb will result in 50% compensation. The policy covers only a maximum of 3 passengers. This add-on is of value to both private and commercial vehicle owners. In fact, in the case of commercial vehicles, having this add-on will save the insured from legal hassles of any kind.

The insurance company will pay the compensation as stated below:

Type of InjuryCompensation(%)
Loss of sight of two eyes or two limbs/sight of one eye and one limb100
Loss of sight of one eye or one limb50 
Permanent disability from injuries other than mentioned above100

7. Daily Allowance

This add-on is also known as the daily garage allowance. It is encashed by the insured when the car has gone for repairs and the insured is not in a position to use the vehicle. It compensates the person for hiring an alternative vehicle in event of the car getting stolen or being under repair. The compensation amount and the number of days for which it is paid are different for different policies. However, this benefit may only be availed if the vehicle is being repaired in the authorised garage of the insurer. You can check the network garages of the insurer before taking the car for repairs. 

8. Key Replacement Compensation

Replacing Frequency Operated Buttons (the technologically advanced keys of the car) is rather expensive. This add-on cover is to pay for the replacement of the car key or lockset when it is stolen, damaged or lost. It is not a standalone cover and concerns the security aspect of the car. This claim will be rejected if the damage or the loss of the FOB was caused due to malicious or deliberate acts. Invoice or receipts have to be duly filed, without which the claim will be rejected.

9. Consumables Cover

This add-on, which is popular with individuals who have high-end cars with expensive components, is used to cover consumable expenses for small parts such as nuts and bolts, screws, etc. This add-on is provided only if the car is not more than 3 years old.

10. Tyre Protect Cover

As the name suggests, this add-on ensures that the insurance agency will cover the cost of damage to your tyres. Such covers not only include the cost of repairing or replacing a tyre, but also the cost of labour (including any labour charges for refitting, removing or rebalancing the tyre). 


A standard insurance policy will offer some peace of mind and will restrict the burn to a small hole in the pocket. However, having the right add-on to your policy cover will boost your armoury to fight back resolutely in case of an unforeseen incident. Therefore, choose wisely!

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