In this current scenario of the pandemic, we all have been advised to boost our immunity so as to tackle the virus. Well, the same goes for one of your most prized possessions, i.e. your beloved car. Don’t you want to increase the longevity of your car so that you can drive smoothly? Of course, you do. And, in order to enhance the immunity of your car so that it runs seamlessly on roads, nothing is better than going for add-on covers. That’s Right! Add-on covers work as a protective shield hence offer complete and all-round, financial protection to your vehicle.
They enhance the coverage of your policy and make you enjoy exclusive benefits. But there is a pool of add-on covers offered by insurance companies. So, which one should you buy? Need not worry as we are here to help.
In this article, we are going to give you a deep understanding of top add-on covers that you should consider buying car insurance online.
1. Zero Depreciation Cover: Do you know the value of your car depreciates by 15% in the first year of purchase itself? Due to which you won’t be able to receive the full claim amount from your insurance company. Well, not anymore, because Zero Depreciation Cover is here to help. Yes, this add-on cover allows you to enjoy the complete claim amount that is usually deducted (if not opted for this cover) by your insurance company from your claim amount.
Now you must be wondering how that happens? As mentioned above, with age, your car goes through standard depreciation every year. It simply means the value of your vehicle gets reduced every year due to natural wear & tear and loss of parts.
Now suppose your car meets with an accident and you approach your insurance company for a claim. Without zero dep cover, your insurance company will deduct the depreciation value from the actual damaging/repairing cost of your car. Hence, offer you the remaining claim amount. Well, which means, the policyholder has to pay the difference from his own pocket.
But with zero dep cover, this is not the case, as the policy owner will get the complete claim amount from the car insurance company without depreciation deductions.
Below is a table showcasing the depreciation rates of a car
| Age of the Car | Depreciation % |
|---|---|
| 6 months and below | 5% |
| 6 months to 1 year | 15% |
| 1 year to 2 years | 20% |
| 2 years to 3 years | 30% |
| 3 years to 4 years | 40% |
| 4 years to 5 years | 50% |
Suitable For:
- People with New/Luxury Cars.
- New/Inexperienced Drivers.
- People Living in Accident-prone Areas.
- Cars with Expensive Spare Parts.
Points to Remember:
- This cover is not available for cars more than 5 years old.
- Zero depreciation cover costs anywhere between 15%-20% of the basic premium.
- Only 2 claims in a policy tenure can be made under this cover.
- It offers 100% coverage for all fibre, rubber, and metal parts without deduction of depreciation.
- Engine damage due to water ingression or oil leakage, any mechanical breakdown, oil change, or consumables is not covered in zero dep.
2. Return to Invoice Cover: As a car owner, you don’t want to imagine a scenario where your car gets stolen, right? And, to tackle this situation, Return to Invoice Cover comes in handy. Even if your car is destroyed beyond repair, this specific cover allows you to claim the on-road price (ex-showroom price + registration cost + road tax) of your car, imprinted on its invoice.
For example- The on-road price of a Maruti Suzuki Alto in the year 2019 was INR 6,00,000. However, the same car’s IDV in the year 2020 would be INR 5,10,000 (assuming a depreciation of 15% in 1 year). So, how much claim can a person get in case of theft/total damage of a car in the year 2020?
Well, a policyholder can claim the on-road price of a car, which is INR 6,00,000 as he has opted for Return to Invoice Cover. However, without this cover, he can only get the price equal to the IDV of the car, i.e. INR 5,10,000.
Suitable For:
- Theft/ Total Car Damage.
- People with New/Luxury Cars.
- New/Inexperienced Drivers.
- People Living in Accident-prone Areas.
- Cars with Expensive Spare Parts.
Points to Remember:
- This cover is not available for cars more than 3 years old.
- Instead of getting the IDV of a car, the policyholder gets an on-road price.
- Availing this cover costs up to 10% of the standard premium.
3. Roadside Assistance: If your car has a breakdown in the middle of a road while you are driving, roadside add-on cover got you covered. Under this cover, a policyholder can get various services and assistance related to:
- Fuel shortage
- Flat tyres
- Engine breakdown
- Oil leakage
- Minor repairs, etc.
This cover provides 24x7 assistance to a policyholder in the situation, especially where the car is not in a movable condition. You have to inform your insurer and your company will either arrange towing service(if the car is not movable) or garage service with its network of garages. However, if the repair work takes a longer time, an insurance company also arranges alternate vehicles/ accommodation for the policyholder.
Suitable For:
- Ideally suitable for every car owner.
- Would be best suited for cars less than 5 years old.
- Someone who travels often.
Points to Remember:
- This cover can be availed at a cost starting from INR 99.
- The assistance will not be given if a policyholder found driving drunk or without a valid license.
- The policyholder can use this cover, maximum for up to 4 times in one policy year.
- Fuel Assistance can only be provided up to 2 times in your entire policy tenure.
4. Engine/Gearbox Protection Cover: An engine is an essential part of a car as, without the proper functioning of the same, your car won’t work. And, many times either due to accidents/collisions or in case of natural/man-made calamities, the higher chances of engine failure or damage can be seen.
Especially if you have a luxury car or a premium sedan, whose engine is costly, it becomes of utmost importance to protect the same as your basic comprehensive policy does not cover engine repair/replacement cost. And, the repairing/ replacement cost of engines can go up to INR 5 lakh, which is surely a hefty amount to pay from your own pocket. This is where Engine/Gearbox Add-on would come as a saviour. This add-on cover gives coverage for complete engine failure if the engine of your car faces damage that could arise due to leakage of lubricating oils or waterlogging into the engine due to natural calamity.
Suitable For:
- People with New/Luxury Cars.
- New/Inexperienced Drivers.
- People living in Heavy Rainfall and Flood-prone Areas-Mumbai, Pune, Kerala, etc.
Points to Remember:
- This add-on cover is available only for cars up to 5 years old.
- The cost of adding this cover goes up to 10% of the basic premium.
- Only 2 claims can be made in one policy year.
- If the engine gets damaged due to self-initiation, it would be considered as a consequential loss hence is not covered under this add-on.
5. Tyre Protection Cover: Tyre damage or rupture can occur anytime, especially when we least expect the same. So the moment your car is in that situation due to not-so-good road conditions of Indian roads, this add-on cover comes to the rescue. Did you know the average cost of a high-end car tyre goes more than INR 1 lakh? And, this is why availing of a tyre protection cover makes complete sense.
When a policyholder opts for this add-on cover, the insurance company compensates for the damages incurred to the tyres and tubes of the car. With this cover, the cost of tyre :
- Replacement.
- Removing.
- Refitting.
- Rebalancing can be compensated.
Suitable For:
- Ideally suitable for All Car Owners.
- People with New/Luxury Cars.
- New/Inexperienced Drivers.
- People Living in Accident-prone Areas.
Points to Remember:
- Damage arising out of violations of operating instructions such as racing, rally, etc. is not covered.
- Damage arising due to a manufacturing defect or service provided by an unauthorized service centre.
- This add-on cover costs up to 10% of the standard policy premium.
6. Consumable Cover: Consumables like nuts, bolts, screws, coolants, lubricants, etc need regular maintenance and replacement. Thus, this add-on cover will help you to bear the cost. At the time of claim usually, these consumables are not covered under the insurance which means the cost of consumables used in car repairing will be borne by the policyholder. But with this add-on cover, the insurance company compensates the cost of consumables involved in the repairing of the car. However, the individual cost of consumables may seem low but it is really helpful if the damage to a car has happened on a big scale.
Suitable For:
- People with New/Luxury Cars.
- People Living in Accident-prone Areas.
Points to Remember:
- This add-on cover is available only for cars less than 5 years old.
- This cover doesn’t apply to consequential damage or wear and tear and is subject to depreciation.
- The cost of this add-on cover goes up to 10% of the basic policy premium.
7. Passenger Cover: We all want to safeguard our family from any mishap. And, no matter how good driving skills you have, an unfortunate event can occur anytime. Thus, in a situation where not only you(policyholder) but your beloved (family, friends, colleagues) are injured too, this add-on cover will provide the necessary financial support.
Passenger cover is an exceptional add-on for your car insurance policy as apart from the driver, it offers big support to passengers sitting in the car as well. This add-on offers coverage for death, bodily injuries, and permanent disability of a co-passenger/s. A maximum of up to 3 passengers can be covered under this add-on. In case of death/permanent disability of the passenger, 100% compensation will be provided. Whereas, in case of bodily injury, the medical/treatment cost will be covered under this add-on.
The car insurance company will pay the compensation as stated below:
| Type of Injury | Compensation (%) |
|---|---|
| Death | 100 |
| Loss of sight of two eyes or two limbs/sight of one eye and one limb | 100 |
| Loss of sight of one eye or one limb | 50 |
| Permanent disability from injuries other than mentioned above | 100 |
Suitable For:
- Ideally, all car owners should opt for this cover
- People with New/Luxury Cars
- New/Inexperienced Drivers
- People Living in Accident-prone Areas
Points to Remember:
- Financial assistance to passengers will not be provided if they step out of the car during the accident
- During an accident, if a passenger is under the influence of alcohol or other intoxicating substances, no coverage will be offered.
8. NCB Protection Cover: There is nothing better to save on your car insurance premiums, right? And, NCB Protection cover allows you to rejoice that joy even if you have already received a claim from your insurance company. That’s Right! With this cover, your NCB remains intact even if you made a claim.
NCB is a result of the flawless and claim-free record of a policyholder. Thus, every year on not raising a claim, a policyholder is eligible to get discounts on his car insurance premiums. These discounts can be availed on the next premiums of your car insurance at the time of policy renewal.
NCB discounts for consecutive claim-free years are as follows:
| Number of Claim-Free Years | NCB Discount Offered |
|---|---|
| 1 Year | 20% |
| 2 Years | 25% |
| 3 Years | 35% |
| 4 Years | 45% |
| 5 Years | 50% |
So, for 5 consecutive years, if you do not raise a claim, a maximum discount of up to 50% of the total NCB accumulated on your own damage will be given on premium. But what would be the case, if you have raised a claim? You will lose all your NCB. No matter in which particular year you have raised a claim, all your accumulated NCB will come to zero. Thus, you no longer get discounts on premiums. This is where NCB Protection Cover helps in saving your NCB even after a claim.
For example-
Naman Verma and Ankur Sharma bought expensive vehicles of the same make and model and chose a comprehensive car insurance policy. Naman has also opted for NCB Protection Cover at the time of purchasing his policy, whereas Ankur did not do the same.
In the 3rd Year, Naman has raised a claim, so his total NCB accumulated till now, i.e. 35% would still remain intact and will not come to zero. Thus, he can further get a discount on his next premium.
However, Ankur also raised a claim in the 3rd year of his policy tenure. Thus, his total NCB accumulated, i.e. 35% will now come to zero hence he cannot get discounts on his next policy premium. This is because he has not opted for the NCB Cover.
| Calculation | Naman | Ankur |
|---|---|---|
| Claim Raised After 3 Years | 35% (accumulated NCB till 3 years) | 35% (accumulated NCB till 3 years) |
| NCB Status (Balance) | 35%(With NCB Cover) | 0 (without NCB Cover) |
Suitable For:
- Ideally, all car owners should opt for this cover.
- People with New/Luxury Cars.
- New/Inexperienced Drivers.
- People Living in Accident-prone Areas.
Points to Remember:
- Only two claims are allowed in a policy year with this Add-on.
- The cost of opting for this add-on cover goes up to 10% of your basic premium.
- NCB Protection Cover can be beneficial, If your car is more than 2 years old and you don’t want to lose your NCB.
Summary
The congestion and turmoil on Indian roads may weaken the parts of your car. And, the repairing cost of the same will be a big burden on your pocket. This is where Add-ons come into the picture. They help in saving the repair and damage cost of a car. These add-on covers can only be availed with a comprehensive or standalone own damage policy and come at an additional cost to your basic policy premium. You can choose any add-on cover based on your needs and budget. Hence, add-on covers help a policyholder to save a lot of money in case of car damage/repair.
