Top 5 Car Insurance Add-ons and their Significance
Published On Feb 11, 2021 10:00 AM By InsuranceDekho
To enhance the coverage offered by a car insurance plan, a car insurance add-on cover is an extra cover that can be opted for with a standard car insurance policy. For a comprehensive car insurance plan, numerous add-ons can be selected.
Many of the most common mistakes people make when buying a car insurance policy in hurry are that they do not invest adequate time researching the policy's complexities, as in, if the policy properly covers all the possible risks or not, what is the process for claim settlement, what is the type of insurance coverage offered by the insurance company in the standard car insurance policy, and so on. You must understand certain key add-on covers that must be selected for the full safety of your car to select the best add-on cover for your car.
Top 5 Car Insurance Add-Ons and their Significance
Here are some of the key add-on covers that can be opted for to enhance your car insurance coverage
- No-Claim Bonus Retention: It is a facility given to all policyholders who have not applied for even a single claim during the period of their car insurance policy; this is known as the No Claim Bonus (NCB). To get an attractive proportion of the discount on the car insurance premium number, NCB may be accrued for years. The downside of NCB is that even if you make a single claim you cannot avail of any bonus. You should opt for NCB retention to prevent such a situation. Under this add-on, you would also be entitled to keep a specified percentage of the NCB if the claim made is below a specified amount.
- Zero Depreciation: To avoid getting a shock when you hear that the whole cost spent on fixing your car damage, on which a claim has been made, is not refunded by your car insurance company. The explanation for this is that, only after deducting the depreciation value/cost of your vehicle, insurance providers pay for the part. Nevertheless, you will have the whole amount paid on the replacement of parts if you have purchased an add-on cover that provides zero depreciation benefit. Ideally, this advantage is reserved for new vehicles and not pre-owned vehicles, so it is exclusive to vehicles not older than 5 years.
- Personal Accident Cover: A comprehensive cover provides you the choice of purchasing personal accident insurance that will include a lump sum payout in the case of accidental death or permanent/partial disability caused by a car accident.
- Engine Repair/Roadside Assistance: This is a rather convenient add-on that includes round-the-clock facilities such as refuelling, towing, flat tire change, mechanical issues relating to the motor, arranging for the services of a mechanic, and so on, in the event of a vehicle breakdown. In a case like that, wherever you are, the insurer will send support. If you are trapped in a remote area, you will also be covered for taxi service, assistance in securing emergency accommodation, and other utility benefits.
- Return to Invoice Cover: You get the original invoice value, plus registration and road tax charges of the vehicle in case of total loss/theft of your car, and not only Insured Declared Value (IDV) (the market value that depreciates over time).
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Getting involved in an accident implies facing a financial crunch that is unplanned. When you require extended coverage, add-on covers in car insurance come into the picture. Add-on covers for car insurance give the covered vehicle extra protection, which will help you enhance the standard car insurance policy.
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.