Advantages of Add-On Plans in Car Insurance

By Sandeep malik - May 18, 2018

Car insurance, also known as motor insurance, is an insurance product that offers financial protection for your vehicle or third party liability against any damage of loss that is incurred by your vehicle. For everyone who owns a car, having valid car insurance is of prime importance; not just because of the coverage, but also because it has been deemed as a mandate under the Motor Vehicles Act, 1988,that every vehicle being driven on Indian roads must be covered with at least a third party liability cover.

Different Types of Car Insurance

These days, it is quite a simple task to purchase car insurance online, but knowing about your options is the first step towards making the right purchase decision. You can purchase your motor insurance online from a number of providers, and the policies might vary in terms of inclusions, exclusions, coverage, and premium, but broadly, it can be divided into two types of plans:
  • Third Party Liability Insurance – This is the minimum coverage that every vehicle is supposed to have according to the law. This insurance policy provides coverage for any damage or injury caused to a third party or third party property. This does not cover any damages caused to your own vehicle or to you, because of which the car insurance premium for this policy is much less than a comprehensive cover.
  • Comprehensive car insurance – As far as motor insurance policies go, a comprehensive cover is probably the most beneficial for car owners. It includes a personal accident cover for the owner driver, which might even be extended to cover named/unnamed passengers. This cover also includes third party liability insurance.

The Need for Add-On Covers

When you buy car insurance online, you get the option to choose from a selection of add-on covers as well. Much like the riders available with medical and life insurance policies, add-on covers offer extra protection for the insured vehicle. Even with a comprehensive insurance plan, there are several exclusions that are not covered, like depreciation, engine damage, or consumables. But, by opting to pay a little more with your car insurance premium, you can avail a number of add-on covers to ensure optimum protection for your vehicle.

Different Add-On Covers

To ensure that customers can get coverage for the most common exclusions of a comprehensive car insurance plan, insurance providers everywhere offer a number of different add-on covers. Some of the most popular add-ons that you can buy with your motor insurance online are:

Zero depreciation cover

This is a highly recommended add-on cover for new cars. It entitles you to claim the complete cost of car repairs and parts at the time you put in a claim. Normally, as soon as you have bought the car, its value starts depreciating, and depending on the time since you bought the car, there are certain costs and events that will not be included in the plan coverage. So, if your car meets with an accident, at the time of repair, you will be liable to bear a portion of the claim amount, depending on the deductibles and the depreciation of car parts. Depreciation rate is chargeable as described by the authorities. However, if you have a zero depreciation cover, the insurer will be liable to also bear the expenses that pertain to depreciation.

Things to know about the zero depreciation cover:
  • This rider is mostly offered to new cars that are less than 7 years old.
  • This cover holds validity only in case of a partial-loss claim.
  • During the policy term, you may make only two claims under the zero depreciation cover.
  • The coverage offered by this cover is very beneficial for a car owner. That is why this cover is the most expensive add-on cover offered by insurers.
Engine protect cover

This is an add-on cover that is designed to help protect the heart of your car, the engine. The engine is without doubt a key component of your vehicle, but normally, comprehensive car insurance policies do not cover damages to the engine.Therefore, the purchase of an engine protect cover can be very useful especially for people in areas that are prone to waterlogging.
Things to know about the engine protect cover:
  • This cover does not entertain claims for engine damage that is caused by an accident.
  • People with high-end cars might find this cover very useful, as the cost of engine repairs for such cars might amount to significant values.
  • This cover is available at very affordable rates.
Roadside assistance cover

 A very useful add-on cover, roadside assistance cover offers round-the-clock emergency services ranging from refuelling and tyre changing to towing. With this cover, you can avail a number of services in case of an accident or emergency. Some of the services offered under this cover include:
  • On site repair
  • Key replacement
  • Lock repair
  • Tire change
  • Fuel filling
  • Car towing
Consumables Cover

Repairing a car takes up a lot of consumables, like brake fluids, engine oil, coolants, and even nuts and bolts. Simple and small things, but the collective costs of consumables might just push your motor vehicle repair bill up to quite a significant amount.However, with a consumables cover, the cost of these items will also be covered by your insurance company.

No Claim Bonus (NCB) protect cover

A car insurance policy is eligible for a No Claim Bonus (NCB) if a policyholder does not make any claim during a policy year. This bonus is offered in the form of a discount on the car insurance premium at the time of renewal. The NCB is quite an attractive benefit, and it doesn’t seem fair that you lose it because of some small damage claim.The NCB protect cover safeguards your NCB even in the event where you have put in a claim, and up to 50% NCB is available to the customers at the time of renewal. However, this cover is generally not offered to vehicles that are older than 3 years.

Choosingthe right add-on coverswhen you buy car insurance online provides you an additional safety net that protects you from unpleasant eventualities. However, don’t just buy an add-on because everyone else has. Assess your own insurance needs carefully and then choose add-on covers based on your requirements.

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