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Add-On Covers in Car Insurance Policy
Motor insurance add-ons are extra protections that can be utilized to extend the coverage of your current plan. These add-ons are available for purchase for an additional price. Here are a few of the extra insurance options available for automobiles: No Claim Bonus Protection, Zero Depreciation, Engine Protection, Key Protection, etc.
Let’s get into greater detail about Car Insurance Add-Ons:
No Claim Bonus Protection Cover
The policyholder receives a discount on the renewal premium for each year without a claim. The name of this discount is No Claim Bonus (NCB). It builds up over time and gets bigger every year. It often falls between 10% and 50% and can result in significant cost savings on the auto insurance premium you must pay.
Engine Protection Cover
One of a car’s most crucial components, the engine, is not protected by a comprehensive plan. You can be reimbursed for the cost of repairing any indirect engine damages brought on by lubricating oil leaks and water intrusion if you have an engine protection cover. It covers the components for the differential, engine, and gearbox.
Pay as You Drive Cover
With a comprehensive car insurance coverage, a Pay as you drive car insurance plan is an additional protection option. By purchasing this add-on, a policyholder can reduce their own damage premium based on the number of miles they drive during the course of the policy year. Few insurance companies now provide this add-on with a comprehensive auto policy. For auto owners who don’t drive their vehicles much or have multiple vehicles, this add-on is particularly helpful.
Zero Depreciation Cover
Even the declining worth of your car is made up for by this extra function. You won’t be responsible for paying for the pieces of your car that have depreciated in value thanks to this function. It is generally valid for personal vehicles and has a cap on the number of claims that can be made during the policy period. Despite having no depreciation coverage, mandatory and optional deductibles (where appropriate) will still apply.
Consumables Cover
Unexpected costs can occasionally wipe out all of your money. All costs associated with purchasing consumables for any dangers covered by the policy are included in the Consumables Coverage. Consumables such as screws, nuts and bolts, washers, air conditioning gas, grease, lubricants, bearings, clips, engine oil, distilled water, oil filter, brake oil, and fuel filter are mainly covered.
Key Protection Cover
Everybody has lost or forgotten their car keys at some point in their lives. When this occurs, the insurance provider can assist by paying the costs associated with replacing and repairing your car keys under the key protection plan.
Daily Allowance Benefit
When your car needs to be repaired after an accident and is parked in the garage, daily allowance add-on protection comes to the rescue. If the damaged car needs to be kept in the garage for more than three days, the insurer will give you a daily travel allowance if you have this add-on policy.
Personal Accident Cover
A comprehensive auto policy covers coverage for both third-party liability and personal injury. With personal accident insurance, you are protected against both accidental death and total and irreversible disability. Additionally, one may acquire this coverage for additional co-passengers, even anonymously, up to the vehicle’s full seating capacity. Even in this instance, the amount of coverage is predetermined.
Roadside Assistance Cover
If you get stranded within the policy-specified distance anywhere in the nation, the insurance provider will send a mechanic to your location to repair any damage to your automobile in addition to offering you roadside help. Your NCB remains unchanged because roadside assistance coverage is not considered a claim.
Return To Invoice Cover
If your automobile is stolen or suffers damage that cannot be repaired, which is referred to as a total loss, then the insurer is required to give coverage in accordance with the invoice amount that you paid when you bought the car under the Return to Invoice Add-On Cover. This price includes first-time registration fees, road tax, and ex-showroom pricing.
Personal Possession Cover
With personal possession add-on cover, you get the coverage in case your personal possessions get damaged in an unfortunate car accident or get stolen from the car when it is parked in authorised parking, There is a limit on a coverage amount that varies from insurer to insurer.
Tyre Protection Cover
A comprehensive plan does not provide coverage in case the tyres of the car get damaged. Thus, a tyre protection cover can be purchased to cover any damages sustained by your car’s tyres and tubes.
Driver and Passenger Cover
Under this add-on, you get coverage in case any of the drivers or passengers get injured in the accident. The insurer will provide financial aid for the medical expenses.
How to Calculate Car Insurance Premium
Car insurance price is decided based on several factors. It is also easy to find out the four wheeler insurance premium using an online car insurance calculator. However, the insurance provider takes into consideration the following parameters before fixing the car insurance price:
- Type of Cover – The standard premium of your car policy is decided based on the type of coverage you opt for your four-wheeler. Basically third party insurance carries the lowest premium as it only covers third party damages. The premium becomes higher if you add own damages cover to it or purchase comprehensive four-wheeler insurance.
- Personal Accident Cover – Personal accident cover is provided in both third-party and comprehensive car insurance policies. The coverage limit is upto Rs. 15 lakh and it can be purchased by paying a nominal extra premium.
- Insured Declared Value – IDV, which is the current market value of the car. It is the maximum amount for which the policyholder can raise a claim during the policy term. The higher the car’s value means higher IDV and vice versa.
- Make & Model – The make and model of the car you want to get insured plays a significant role in deciding the premium. Insuring a higher-end car model would be costlier than insuring a base model of the same car. The reason being the higher cost of repair or replacement of their parts
- Fuel Type – Repairing a diesel or CNG car is an expensive affair than repairing petrol cars. Therefore, insuring a petrol car will cost less in comparison with the other fuel-types like CNG, LPG, and EV.
- Location – The geographical location of the insured car also impacts the final cost of policy premium. Usually, the premium is higher in metropolitan cities as it has denser traffic, and also considering the higher probability of accidental damages on the city roads.
- Year of Manufacture – The manufacturing year of the insured vehicle is also taken into consideration when deciding the car insurance premiums. Usually, insuring newly launched vehicles can be expensive since their spare parts might not be available in the market.
- Add-on Covers – Enhancing the policy coverage with a car add-on cover or a rider benefit like roadside assistance, zero depreciation will increase the premium. However, it can be purchased only with a comprehensive car insurance plan. Therefore, buying add-on covers will increase the premium.
- Claim History – If the policyholder has not filed any claims during the policy term, the insurer provides the benefit of a No Claim Bonus on their own-damage premium which results in a reduced premium.
Best Car Insurance Companies in India 2022-23
The complete list of the top auto insurance providers in India is presented in the following table, together with information on their claim experience rate and the number of network garages they provide:
Benefits of Buying Car Insurance Online
Buying car insurance online is a common practice today. By purchasing a 4-wheeler insurance policy online, you can insure your car against any damage due to an accident, theft, fire etc. within 2 minutes. Offering quick comparisons and safe payment modes, online buy has a clear win over offline mode because of the following reasons-
| Categories |
Buying Car Insurance Online |
Buying Car Insurance Offline |
| Buying Process |
Can be purchased online from the insurer’s official website or Policybazaar.com using a smartphone or laptop. |
Requires physical visit to the insurer’s office or by connecting with the agent |
| Insurance Premium |
Lower premiums due to the absence of intermediaries. |
Higher premiums due to higher operational costs and involvement of agents. |
| Convenience |
More convenient as it only requires a smartphone and a good internet connection. |
Less convenient as customers need to meet with the insurance agent. |
| Transparency |
More transparent as there is no role of an agent or intermediary. |
There is less transparency as agents play a big role. |
| Customer Support |
Easy to connect with the customer support team 24×7 via emails and calls. |
Policyholders can connect with the customer support team or the agent during office hours. |
| Paperwork |
Minimum to zero paperwork. |
May require a lot of paperwork. |
| Renewal Process |
Easy to renew as the policyholder’s details are auto-saved with the insurer |
The renewal process is cumbersome and takes time. |
