Owning a car today is no longer perceived to be a luxury, but a necessity. Given the high disposable income, easy availability of finance and attractive discounts, buying a new car has become easier as compared to the past. However, the cost of maintaining a car is an on-going expense which many find burdensome.
A typical family is saddled with EMI payments, fuel expenses and maintenance costs every month. To add to this, if the car meets with any kind of an accident, the cost of repair burns a huge hole in the pocket and has the potential to disrupt monthly cash flows adversely.
A comprehensive cover with value-added features, therefore, is often recommended by experts. Car insurance cover has become ‘really’ inclusive these days, offering a wide range of add-ons. Add-ons are options that improve the basic coverage offered by a policy.
Here are some add-ons one must include in the policy:
- Zero dep: Zero depreciation or ‘zero dep’ policies are gaining popularity with increasing awareness among vehicle owners in India. A zero depreciation cover ensures that in case of an accident, you will receive full claim without any deduction for depreciation on value of parts replaced.
- NCB retention: No claim bonus (NCB) is a reward for those policy holders who have not claimed against their car insurance policy in the past year(s). Over a period of time, NCB can be accumulated to provide a discount of up to 50%. However, even a single claim on your policy can bring NCB down to 0%. By taking an add-on, this can be avoided. Under this add-on, even if you have a claim, subject to a certain sum, NCB earned by you remains protected at the current eligible percentage, instead of becoming 0% under the normal policy.
- Road side assistance: Insurance companies are increasingly focusing on providing road-side assistance benefits to customers. By paying an extra premium, customers can avail the benefits under this add-on cover. However, some companies provide these benefits as a part of the basic insurance cover as value added services.
- Engine cover: The engine is the most costly part of a car and repairing an engine, particularly when it has been damaged due to flooding, can be a costly affair. Hence engine cover becomes a ‘must-have’ cover. Though add-ons are good to have, a word of caution is needed here. Too many add-ons can increase your premium substantially. It is also important to have only those add-ons for which you have a need.
- Key replacement: Many insurance companies reimburse the cost of replacing the ignition key up to a certain limit. But, the amount reimbursed typically is way less than the actual cost of the replaced key.
- Daily cash allowance: This allowance, which covers the owner’s transportation costs, is paid only if your vehicle has a need to be in a garage for more than 3-4 days. Generally, most vehicle repairs hardly take as many days and therefore, this add-on seldom comes of use.
- Return to invoice: This benefit is available only for new cars and for the first year of the vehicle. If your vehicle gets totally damaged, 100% of the value of the vehicle (without deducting 5% depreciation) shall be reimbursed to the car owner. Anyway, even without this add on, 95% is payable for a total loss case.
Building a sound car insurance policy online is easy and add-on coverage can greatly improve the value of your car insurance plan only if you select them according to your requirement. So choose wisely!
