Daily Allowance Add-on Cover in Car Insurance

Daily Allowance Add-on provides a daily allowance to the policyholders in case the car is in the workshop for more than two days. In India, the amount of cash allowance generally provided under this add-on is of Rs. 500 for up to 14 days. The amount of compensation and the number of days can vary across insurance companies. This benefit is payable only if the car is repaired at a network garage. This add- on comes into picture generally for the people who are heavily dependent on one vehicle and in locations where public transport is not an option.

Benefits of Daily Allowance Add-on Along With Car Insurance:

Buying a suitable, additional coverage with a car insurance policy is always beneficial for the policyholders. They can opt for various benefits that accompany the purchase of an Add-on. The Daily Allowance Add-on provides following benefits if the policyholders purchases it with the comprehensive car insurance policy:

1. Convenient Commute: The policyholder does not have to avoid going out or pay traveling expenses from their pocket because of the breakdown of the car. The policyholder can travel by opting for a convenient mode which is opting for Daily Allowance Add-on Along With Car Insurance. The working professionals need not to take leave from office or opt for an inconvenient mode of transport just because they cannot use their car. Others can keep visiting the places they want to without staying home for long stretches of time.

2. Helps You Save Money: This is one of the major benefits of the Daily Allowance Add-on. The insurance provider will bear the cost of travelling while the car of the policyholder is undergoing repairs. They can use this money for travelling without facing any difficulties.

3. Freedom of Choice: The policyholders need not to select the unwanted travelling options like travelling through public transport because of a car breakdown. The policyholder can simply get in touch with the insurance provider and decide the mode of travel whichever they wish to use as per the terms and conditions of the policy.

How To Buy Daily Allowance Claim Add-on?

A Daily Allowance Claim Add-on can be purchased along with Standalone Own-Damage Car Insurance Policies as well as Comprehensive Car Insurance Policies. Car owners are generally advised to buy a Comprehensive Car Insurance Policy for a 360 degree protection. The policyholder has the option of buying a Daily Allowance Claim Add-on at the time of purchasing the policy and in case he/she didn't buy it at the time of purchase they can opt for it while renewing the policy.

Who Should Opt for Daily Allowance Add-on Along With Car Insurance?

1. People With Single Car: Working professionals who are dependent on one car only should buy this add-on as this is important for them and will be beneficial if their car is with the garage. They need not to be worried about unwanted travelling options like travelling through public transport hence they should buy.

2. Those who do not prefer public transport: In many countries public transports are in good shape however in India in public transport sometimes not clean and not safe that is the reason many people avoid travelling through buses and other modes of public transport. This add-on should be selected by those who do not prefer public transport.

Things to Remember at the time of Purchasing Daily Allowance Add-on Cover

The daily allowance add-on cover for car insurance comes with some specific terms and conditions. Some of the common terms and conditions are mentioned below:

1. Available only with own Damage Cover

The daily allowance add-on cover can be purchased only with own damage cover, in short it means that the add-on can be bought along with a comprehensive car insurance plan and not any third party insurance plan.

2. Additional Premium

The daily allowance car insurance add-on cover needs to be bought by paying an extra premium amount towards the add-on cover apart from the premium amount that you are paying for the comprehensive car insurance plan.

3. Avail with Maximum Coverage Duration

The daily allowance add-on cover for car insurance can be purchased with a maximum coverage duration. It basically means that the insurance company will pay you the compensation for a fixed number of days that is mentioned in the policy document or till the time your car gets repaired, whichever happens earlier.

4. Limited Claims

Various car insurance providers only allow the policyholder to make a limited number of claims under the daily allowance add-on cover. While, there are insurance companies that can make just 2 claims on an yearly basis, on the other hand there are other companies that can go up to 3 claims in a year. Therefore, you must confirm with your respective car insurance provider about the number of claims that can be made in a policy duration before deciding to purchase it.

What is Covered and Not Covered in Downtime Insurance?

Car downtime insurance provides compensation for the loss of business for commercial and rental car owners when their vehicle is being repaired. When commercial vehicles or rental vehicles are damaged due to accident/fire or stolen, a downtime insurance can provide a stop-gap relief. Here are the inclusions and exclusions of a downtime insurance policy.

What Is Covered?

• Loss of Income or Usage Fees: If you use your vehicle for business (e.g., rideshare, delivery, or rentals), downtime insurance may cover lost income while the car is in repair due to a covered event.
• Rental Car Reimbursement: Pays for the cost of a rental vehicle while yours is being repaired, up to daily and total limits.
• Repair-Related Delays: Covers the period your car is in the shop for repairs, provided the repairs are due to a covered incident (like a collision or theft).
• Business Interruption Coverage (Commercial Vehicles): For fleet owners or commercial operators, it may reimburse lost contracts or productivity due to a non-operational vehicle.

What’s Typically Not Covered:

• Mechanical Breakdown: If your car is down due to wear and tear or mechanical failure (not a crash or insurable event), it’s usually excluded.
• Delays Not Caused by a Covered Event: For example, waiting on parts due to supply chain issues not tied to a covered accident.
• Downtime Without Proof of Loss: You usually need to show proof of income loss or business impact (e.g., rideshare earnings history or business invoices).
• Personal Use Losses (Non-Income): If you don’t use the car for business and just face inconvenience (not income loss), standard policies may not pay out — unless you have a rental reimbursement add-on.
• Unauthorized Repairs or Delays: If you delay repairs or use a non-approved shop, insurers may reduce or deny compensation.