Crucial add-on covers
IRDAI or the Insurance Regulatory and Development Authority of India has brought in a notification with respect to motor vehicles insurance, which is expected to have a significant bearing on the purchasing decisions of the customer, i.e. you. Effective 1 August 2020, this change will result in a visible reduction in the prices of motor vehicles, whether two-wheelers or four-wheelers. As per this notification, now the mandatory long-term insurance packages that were offered while purchasing the new vehicles will no longer apply, thus leading to a fall in the effective price of the new vehicle*. It is to be noted that the multi-year third-party insurance will still come along with the vehicle. What’s changed is that the insurance companies can only offer one-year own-damage cover along with it, instead of the earlier three-year package that came with cars.
Since mid-2018, it is mandatory to purchase a long term motor vehicle insurance along with a new vehicle, thus leading to higher effective prices. These long-term packages till recently offered a comprehensive policy that was a combination of third-party and own-damage policies.
The latest change means that the first year policy will only have own-damage policy for one year. This will not just reduce the upfront cost significantly, but this also gives the customer the power of choice. Now they have the option to switch to another policy, in case they are not happy with the original one.
That being noted, it is, however, important to have a comprehensive car insurance. In fact, a comprehensive car insurance is the least you should have. You must go for a few crucial add-on covers so that your loved vehicle is protected all the time.
Let us go step by step.
Why is comprehensive car insurance important?
While third-party car insurance provides cover against any third-party damage, it does not give cover to the owner himself or to the vehicle. That is a cover provided by the own-damage policy. The own-damage cover protects the car against accidental damages, theft, vandalism, natural calamities, and more, as opposed to a third-party cover which is limited in nature and includes coverage for third-party injuries, property damage, and death.
While you get a mandatory third party car insurance third party car insurance policy at the time of vehicle purchase, it is important to get an own-damage policy, or better, a comprehensive policy which is a combination of both third-party and own-damage covers. That way, you will be able to cover most of the damages.
A comprehensive policy is important for the following precise reasons:
Cover
A comprehensive insurance policy gives assurance of cover where third-party does not, i.e. you will be less worried about damages caused to your own vehicle if you are covered by a comprehensive policy. This policy gives end-to-end coverage.
Peace of mind
A comprehensive policy ensures that you do not have to pay the cost of extensive repair and damages out of your pocket. This may be costlier than a third-party insurance cover, but saves a lot of money as it not only provides cover to the third party involved in the accident, but also to self, coupled with coverage for other disasters such as fire, theft, natural disasters, and more. This gives you peace of mind and helps you stabilise your finances in the event of huge damage or destruction.
NCB or No Claim Bonus
There is a benefit of No Claim Bonus if you do not raise any claim during the active years of a comprehensive policy. However, subject to the terms and conditions of the insurance company, the policyholder can receive an NCB discount during car insurance renewal, which keeps on increasing every year (claim-free), till the time it reaches 50%.
Despite these covers, there are some aspects where even a comprehensive policy doesn’t cover you. That is where an add-on kicks in and adds the extra layer of protection for your car.
What are the add-ons to look for?
While you might need to shell out some more money for an add-on, the benefits that they provide are far more than the extra cost you need to pay for them. Think of it this way. Money saved is money earned.
Following are some of the add-ons to invest in so that you saved from some regular expenses in the future.
Personal accident cover for passengers
This mandatory addition comes in two forms, one for the drivers and the other for the unnamed passengers, including friends and family. Depending on the sum assured, the policyholder can claim 100% of the amount. In the event of the policyholder's death, the nominee can claim the sum. Personal accident cover comes with quite a few useful features such as temporary total disability cover, death cover, accident hospitalisation cover, permanent total disability cover, and more.
Breakdown assistance
Ever wondered what insurance policy would cover you in case of a roadside accident or a breakdown? A comprehensive cover with the Emergency Roadside Assistance add-on. Having this cover ensures that you get professional assistance in case of experiencing breakdowns in the form of issues such as a flat tyre. This add-on helps you get towing support and other repairing services if you are stranded.
Car extraction and removal
While we wish you never need to use this, but having this add-on will ensure that you get crane assistance from the site of the accident or incident.
Dead battery support
Battery drained out on the road? No worries. This is where having this add-on will come to your rescue.
Vehicle unlocking support
Have you been locked out of your car while you forgot your keys inside? This is more common than people would like to admit. There is an add-on which safeguards you against that as well.
Depreciation Shield
Typically, a regular insurance will not cover costs arising out of situations like damages to the tyres, glass components, etc. This results in heavy expenditure that goes out of the pocket of the policyholder, in the event of an accident. This add-on ensures that while calculating the claims for such items, no depreciation is taken into account, and you do not need to pay anything on your own.
Add-on services, in more ways than one, safeguard you against most of the problems and issues that you may face as a vehicle owner. Further, insurance companies such as Bajaj Allianz provide additional add-on tools in the form of those that take care of consumables expenses and provide accident shield, apart from the aforementioned.
These ensure that your vehicle gets a complete cover in case of any possible damage that one can think of, no matter how small or big.
How to get car insurance policy add-ons?
While you can get your add-ons offline, the best way to purchase and renew policies, as well as add-ons, is online. Not only is it easy but convenient as well, both the features extremely important in today’s fast-moving world. For instance, at Bajaj Allianz, you can simply log on to the website, enter your details, get a quote and get done in a few steps. The process remains as easy for add-ons as well.
Add-ons, in whichever mode you purchase them, work well to enhance the safety cover that insurance provides to your four-wheeler.
Life and time are unpredictable. The better policy you curate, the better prepared you are. After all, your car is a result of your hard-earned money and you would not want it to go waste due to external factors, because there was not sufficient protection. While third-party serves as good long-term protection, coupling it with an own-damage policy of your choice and topping it off with add-ons ensure that your car gets all-round protection. Adding add-ons along with a comprehensive policy ensures that your car gets the best cover there is. And companies such as Bajaj Allianz help you get it easily.
*Source - IRDAI
Photos courtesy Bajaj Allianz General Insurance
