Car Insurance Add-ons - Everything You Need to Know

Car insurance add-on covers, as the name suggests, are optional covers that can be purchased along with a car insurance policy to enhance its coverage and enjoy exclusive benefits associated with them. There is a pool of add-on covers offered by the insurance companies. A car insurance policyholder can purchase them by paying an extra amount. These add-on covers are available only with comprehensive and standalone own-damage car insurance policies. Having understood what they are, let us proceed to learn in detail about each of them.

Types of Car Insurance Add-ons

1. Zero Depreciation Cover: It is one of the most popular add-on covers that exempts the policyholder from bearing the depreciation cost of the car during claim settlement. By default, that is, in the absence of a zero depreciation cover, an insurance company factors in the depreciation cost of replaced/repaired parts from the claim amount. As a result, the policyholder gets a lower claim amount. The zero depreciation add-on cover allows the policyholder to enjoy higher claim amounts by waving off the cost of depreciation applicable on the insured’s car.

Important Features of Zero Depreciation Cover:

• This add-on covers all parts of the car at 100% cost except tyres, tubes, and batteries which are covered at 50% cost.
• The cost of zero depreciation cover is directly proportional to the car’s age and hence it should be availed as early as possible.

1. No Claim Bonus (NCB) Protection: NCB Protection add-on cover retains the policyholder’s NCB discount even after a claim has been filed in the policy tenure. The policyholder can enjoy the allotted discount on own damage (OD) premium at the time of renewal of his/her car insurance policy. The NCB discounts for consecutive claim-free years are as follows:

2. Roadside Assistance Cover: It is a complete cover in itself that comes with numerous assistance services that a policyholder can request in case of a breakdown of his/her car or the scenarios in which the car is not in a movable condition. The request can be made in case of:

• Fuel shortage
• Flat tyres
• Engine breakdown
• Oil leakage
• Minor repairs, etc.

3. Roadside Assistance Cover: It is a complete cover in itself that comes with numerous assistance services that a policyholder can request in case of a breakdown of his/her car or the scenarios in which the car is not in a movable condition. The request can be made in case of:

• Fuel shortage
• Flat tyres
• Engine breakdown
• Oil leakage
• Minor repairs, etc.

4. Engine Protect: Engine Protect cover allows the policyholder to claim indemnification for engine and gearbox damages, which are otherwise not covered under a standard car insurance policy.

5. Insurance at Manufacturers Selling Price (Insured’s Declared Value is equal to Manufacturers’ Selling Price): This add-on cover allows the policyholder to get claim amounts equal to the car manufacturer’s selling price in case of total loss/constructive total of the car.

6. Return to Invoice Value (Insured’s Declared Value is equal to On-Road Price): This add-on cover makes the insurance company take the on-road price of the car as its IDV. This means that the policyholder will get a claim amount equal to the on-road price of the car in case of total loss/constructive total loss or theft of the car.

7. Daily Cash Allowance Benefit: With this add-on, depending upon the amount of extra premium, the policyholder gets a daily cash benefit when his/her car is registered for and the insured's car is out for repairs for more than a day. The cover is also applicable in case of theft or loss of the car and the allowance will be offered until the date of recovery.

8. Consumables Cover: When you opt for this add-on, the insurance company will pay for the loss/damage of the consumable items of the car such as engine oil, screw, grease, washers, etc.

9. Key/Lock Cover: Under this add-on, the car insurance company will pay the policyholder the cost of obtaining a new key/lock in case the original one gets damaged/lost.

10. Registration Certificate (RC) Cover: Under this add-on, the insurance company will reimburse the cost of procuring a new RC of the insured’s car in case the original one is lost/damaged.

11. Permit Cover: With this add-on, the policyholder will be reimbursed for the cost of getting a new permit for his car in case the original one gets lost.

12. Licence Loss Cover: By opting for this add-on, the policyholder can claim indemnification for the loss of his/her driving licence kept in the car.

13. EMI Cover: Under this add-on, the insurance company takes the liability to pay certain EMIs of the insured’s car on behalf of the policyholder when he/she is unable to afford the payment.

14. Policy Extension Cover: When a policyholder opts for this add-on, the insurance company extends the policy coverage of the insured’s car for certain days over and above the standard expiry period.

15. Personal Belongings Cover: Under this add-on, the insurance company pays a certain amount to the policyholder in case of loss of his/her personal belongings kept in the insured’s car.

16. Hotel Allowance: When a policyholder opts for this cover, the insurance company pays the hotel expenses to the policyholder if he/she gets stranded because of the breakdown of the insured’s car.

17. Emergency Travel Allowance: This add-on makes the insurance company indemnify the cost of commutation services to the policyholder when the insured’s car suffers a breakdown.

18. Repair of Glass, Fiber, Plastic & Rubber Parts Cover: This add-on cover retains the NCB discount if the policyholder has claimed compensation for the damages of glass, fiber, plastic and rubber parts of the car.

19. Tyre Cover: When a policyholder opts for this add-on, the insurance company compensates for the damages incurred by the policyholder for tyres and tubes, which are not covered otherwise in the standard car insurance policy.

20. Lifetime RoadTax Clause: This add-on makes the insurance company pay the unexpired portion of road tax on behalf of the policyholder.

For further reading:

How to Purchase a Car Insurance Policy Online

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.