If the choice is diverse in terms of vehicles, the same is the case for insurance covers for them too. Earlier, when a vehicle just had a third-party cover or full insurance cover, now there are add-on packs for each part of the vehicle. Insurance companies claim that these add-on packs ensure that the owners do not have to spend even a small amount if the vehicle meets with an accident. Here is a low-down on some of the add-on packs that are available in the market today:
In case of an accident, some parts of the vehicle need to be changed. In such case, normally, the insurance companies consider the age of the vehicle and the part before deciding the reimbursement amount. If the part that need to be changed is old, the pay-outs are made after considering the reduced value of the part based on its rate of depreciation. The pay-out could be about half the cost of the new part. In such cases, the vehicle owner has to pay the remaining amount to replace the damaged part.
The zero-depreciation policy provides full settlement coverage. If this add-on pack is taken along with a full-cover insurance, in case of an insurance claim, the owner gets the full cost of the part replaced reimbursed. This means, the cover does not consider the depreciation of the part while making a pay-out. The insurance companies claim that owners do not have to shell out any money with this add-on pack. The zero-depreciation policy is available only for the first five years of the vehicle.
Engine protection policy: This add-on pack is targeted at new car owners. The cover is available only for the first three years of the car. The cover protects the owner from any expense that could arise due to engine repair other than accidents. Any repair to engine can cost a bomb and hence engine problems are a nightmare for owners. Car owners can breathe easy if they take this add-on pack. The pack is more helpful to people who face threats of flooding.
Get your full money back
Return to invoice add-on: As the title suggests, owners get back the full amount he or she has spent buying the car including the road tax and registration charges. You can make a claim if the car is stolen or in case of total loss. In regular policy, owners only get a pay-out based on the insured declared value (IDV) of the vehicle. The IDV depreciates with every passing year. However, with the return to invoice add-on, vehicle depreciation is not considered, and the owner gets the original purchase price. Th cover is available for vehicles that are up to three years old.
If insurance is not claimed
No-claim bonus: When the premium for a year is paid and if a claim is not made, usually the owner loses the full amount. The add-on pack known as no-claim bonus reduces this loss to the owner. If the car owner does not make a claim a year, he or she gets a 20% discount in next year's insurance premium. If no claims are made in subsequent years too, the discount increases, and an owner can get up to 50% discount on the insurance premium.
If you are stuck on road
Roadside assistance: This add-on cover is particularly helpful to those who undertake long journeys regularly. Through this cover, the insurance company will provide services like refuelling, changing of flat tyre and arranging a mechanic's help in case of a breakdown. This add-on is available only when an existing policy is renewed. Usually, a new policy won't have this add-on feature. The pack is added to the policy for a small fee.
Daily allowance: For somebody who uses the car daily, he or she gets paid an allowance when the car is in the workshop. Until the car is repaired, the insurance company pays the owner a stipulated amount for using taxi. If the vehicle is stolen, the same allowance is provided until the insurance company provides an alternative vehicle to the owner. The feature is an add-on to a full-cover insurance policy.
If you lose the keys
Key replacement compensation: It is common for people to forget their vehicle keys. You might be wondering why you need insurance for forgetting the keys. For most vehicles, if keys are lost, the only option left will be to break the lock. In that case, the insurance company will bear the cost of installing a new lock. If a theft takes place by breaking the lock, the insurance company will pay for the replacement of the lock.
Get paid for nuts & bolts too
Consumables cover: Usually, nuts, bolts and engine oil etc are not covered under insurance. That is because these items are brought from outside. In such situations, consumables cover will protect the owner from such expenditure.