By Neeraj Gupta
Whether you just drove off your new shining car from your dealer’s cart or riding your old jeep off-road, the fact is, the law demands you to have motor insurance. And even if you have a motor insurance, chances are that you still might have to shell out a good amount of money at the time of utmost need. Wondering why? The answer is simple. Your plain vanilla insurance does not provide protection to you and your car in every circumstance. That’s where add-on covers become important. Here are a few add-on covers that you should have for your vehicle.
Just like everything loses its lustre after a period of time, the same applies to your vehicle. Your vehicle will lose some of its value during the policy period due to normal wear and tear. Suppose, your car gets damaged in an accident and some of its parts need to be replaced. In that scenario, instead of the current value of your car, you will get the depreciated value. The depreciation rates vary as your car gets older. For the first 6 months, depreciation is estimated at 5%; for a car older than 6 months but less than a year old, depreciation would be 15% and for a car older than a year depreciation varies from 20-50%. Zero depreciation is an add-on which offers complete coverage without taking depreciation factor into account. It means, if your car gets damaged following a collision, you will receive the entire cost from the insurer.
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It is a must add-on cover and can turn into a wise investment decision. The engine failure can cost you anywhere around Rs.10,000 to Rs.50,000 for repair and even higher in the case of engine seizure. Water logging during monsoon season is a common problem in many parts of India, which may cause severe damage to the engine. Moreover, your traditional car insurance does not cover engine damages due to oil leaks or if water enters the engine. Engine protection offers protection to the engine, especially in the case of flooding. As water logging is a common problem in our country, therefore, opting for engine protection has become a necessity.
NO-CLAIM BONUS (NCB) PROTECTION
No-Claim bonus acts like a reward for those who don’t claim their insurance for the entire policy year. Generally, many people buy car insurance and yearly renew it without actually filing for any claim. They get a discount on their renewal premium known as NCB; this discount can go up to 50%. You will only get this benefit if you do not make a single claim in the complete policy year. But if you have made even one claim, you will not get any relaxation. NCB protection add-on acts like a guard to no-claim benefits.
(The author is Head of Motor Insurance, Policybazaar.com)