What comes first in your mind when you have just bought a car? Most probably, getting its insurance done for financial and legal protection. While comprehensive car insurance has its own damage and third-party cover, it may not cover multiple aspects, like car depreciation.
Now, the question is how to cover your car more comprehensively to ensure better financial safety. Here is the role of add-on covers in car insurance. We offer a detailed guide on insurance add-ons and popular options for your vehicle.
What is an Add-on Cover in Car Insurance?
An add-on car insurance coverage provides additional protection alongside your basic policy. An add-on element focuses on specific parts or terms not covered under standard insurance. For instance, an engine protection add-on covers the damage to the car's engine due to water intrusion, oil leakage, etc, which is mostly not covered under basic policies.
If you anticipate certain risks, an add-on can offer targeted coverage.
Moreover, You must know you can't buy an add-on with third-party car insurance. So, you must have comprehensive car insurance or a standalone own damage cover to get an add-on.
When Can You Get a Car Insurance Add-on?
Add-ons in car insurance are generally bought while buying the car insurance. Moreover, you can also buy them when your car insurance renewal ends. Apart from these two instances, buying add-ons after a policy has been issued is not possible in India.
Four Popular Add-ons in Car Insurance
While many add-on covers are available in India, here are some of the most popular ones.
- Zero Depreciation Cover
A car starts losing its value as soon as it gets sold, known as depreciation. Depreciation is an important factor in deciding insurance coverage. The more depreciated the car, the less the Insured Declared Value (IDV) will have. But with Zero Depreciation cover, you can make sure that the depreciation is not being considered for the IDV.
- Engine Protection Cover
An engine protector in car insurance is an add-on that specifically protects the car's engine. Notably, most car insurance doesn't cover engine-related problems due to water intrusion or oil leakage.
So, if you think there's a high risk of such incidents, you should include this car insurance add-on. This add-on can be quite beneficial for people who live in flood-prone areas or drive their cars on rough terrain.
- No Claim Bonus Protection Add-on
Now, let's understand one of motor insurance's most sold add-on covers: the no-claim bonus protection. As its name suggests, it protects your no-claim bonus, but from what? When you buy comprehensive car insurance and don't make a claim, you get a 10% discount on the own damage component at the time of car insurance renewal.
But what if you have to make a small claim? If you make a claim, the discount will be cancelled. The good news is that the discount accumulates up to 50% if no claims are made for five consecutive years.
To prevent losing your NCB after a minor claim, you can purchase a no-claim bonus protection add-on, preserving your bonus even after filing a small claim.
- Return to Invoice Cover
Do you want to live without fearing your car being totalled or stolen? As a car owner, it seems impossible even without comprehensive coverage. The reason is that the insured sum allotted to the car by the insurer is the maximum amount you can get, even if your car gets totally damaged or stolen. Moreover, considering the car's depreciation, this insured sum decreases as time passes.
But with a return to invoice cover, you can be stress-free as this add-on cover in car insurance stands for exactly what its name says. Here, in the event of a total loss or theft, you will receive compensation equal to the car's invoice value.
To sum up, add-ons in car insurance are like extra layers of protection for your vehicle. They are worth considering if you want to maximise your coverage by adding components not covered in your primary car insurance plan. However, you should also assess your car and some factors before buying these add-ons as, in some cases, the added value might not justify the cost.
Also, ensure you purchase your insurance and any add-ons from a trustworthy company like Generali Central.
