While auto insurance is considered as a recurring annual expenditure by some, one has little choice but to buy the mandatory third-party vehicle insurance.
Insurers offer a lot of add-on covers that provide policyholders many benefits and have become an integral part of a comprehensive car insurance package. Motor insurance constitutes of own damage and third-party insurances.
Any vehicle that plies on the road needs a third-party cover under the Motor Vehicles Act and insurers have to ensure that the cover is available at their underwriting offices. As per the Motor Vehicles Act, the third-party cover is unlimited in the case of an accident and the entire compensation has to be paid by the insurer.
While third-party insurance cover is mandatory, a policyholder can opt of add-on covers to the basic vehicle insurance. The add-on covers come in handy, especially for roadside assistance in case of a breakdown of the vehicle.
The pricing of the add-on covers is based on the Insured Declared Value (IDV) of the vehicle and engine size.
Most insurers offer add-on covers on an annual basis, along with the regular motor insurance policy, and mid-term inclusion or surrender of add-on cover is not permitted.
Here’s a list of some popular add-on covers which general insurers provide for motor insurance:
Zero depreciation is one of the most popular add-on covers sold by general insurance companies. It ensures that the policyholder can receive a full claim on the value of parts that are replaced after an accident.
Most insurers offer zero depreciation for the first three years from the time of purchase of the new vehicle. As the car gets older, the premium for zero depreciation add-on policy will become expensive.
Getting full claim without any depreciation of plastic items and windscreen and other such parts that are fully replaced after any accident is beneficial to a policyholder.
A personal accident add-on cover in a vehicle insurance includes the owner or the driver if he is employed. In case of a owner driver, a policyholder’s nominee is entitled to a 100% claim in case of death.
The policyholder will get 100% claim depending on the sum assured in case of permanent loss of arms or legs.
However, no claim amount is paid if the owner or the driver does not hold a valid driving licence. Also, if the owner has multiple vehicles, the add-on will be provided only for one vehicle for which the insurance is underwritten.
The add-on cover for loss of personal belongings covers theft of gadgets like laptop, mobile phone put inside the locked vehicle.
This is a popular add-on cover at a very nominal cost, which takes care of the car in case of breakdown or accident on the road. The policyholder will have to call up the designated helpline number of the insurer and help will reach him.
The cover will take care of minor repairs on road and the cost of spare parts, if required, will have to be paid by the
The policy covers replacing of flat tyre, alternate battery, alternate key, towing vehicle, and even emergency fuel and alternative vehicle. The policyholder will have to submit an identity proof at the time of delivery of the keys.
Typically, the assistance in towing the vehicle to the nearest garage is available within a radius of 25 kilometers.
If the towing distance exceeds the the limit mentioned in the policy, the policyholder will be charged accordingly. A few insurers even provide daily cash benefit to cover the policyholder’s conveyance expense in case of breakdown, while the car is being repaired. The premium for roadside assistance cover will depend on the size of the vehicle and most covers have a cap on the number of times the service can be availed.
This add-on cover provides protection to the engine in case of flooding during monsoon. Since waterlogging is common in most Metros, hydro-static lock is a major cause of engine failure. Any damage due to hydro-static lock, which happens if one repeatedly tries to run a moist engine, is not covered under a regular motor insurance policy. So, an add-on cover will save you from spending from your own pocket.
The policyholder will have to keep in mind that the add-on covers will not be applicable if the vehicle is used for motor rallying or if it is not being used or driven according to the applicable laws and regulations of the Motor Vehicles Act.
In driver’s seat
* Any vehicle that plies on the road needs a third-party cover under the Motor Vehicles Act
* Insurers have to ensure that the cover is available at their underwriting offices
* As per the Motor Vehicles Act, the third-party cover is unlimited in the case of an accident and the entire compensation has to be paid by the insurer
* While third-party insurance cover is mandatory, a policyholder can opt of add-on covers to the basic vehicle insurance
* The add-on covers come in handy, especially for roadside assistance in case of a breakdown of the vehicle