Must have add-ons for your brand new car

Every year, over 10 lakh road accidents are reported in India in which nearly 1.5 lakh people are killed, that’s about 400 fatalities in a day.

A report from the transport research wing under the Ministry of Road Transport and Highways reveals that over 35 percent of the road-accident deaths occur on National Highways and over 28 percent of accidental deaths take place on state highways. Though we cannot make these accidents negligible, the liability originating from damage to property during accidents must be diversified.
 
As per the Motor Vehicles Act of 1988, valid motor insurance is mandatory for plying any vehicle on road. However, as customers, we don’t attain a hundred percent immunity just by availing the mandatory third-party insurance. Also, when you opt for a comprehensive insurance cover, it does not provide full coverage to different degrees of damages. An individual should seek to add on covers vis-a-vis the risk exposure.

 
Return to Invoice
 
This will make sure the insurer gets the original invoice value of the car including the registration and road tax paid along with the ex-showroom price of the car at the time of purchase of a vehicle. In short, this add-on covers the gap between the insured declared value and the invoice value of the car. This add-on is not to be used to claim for repairs and small damages. It is used to retrieve the financial loss of a stolen car or against a scenario of damage beyond repair.

 
Zero Depreciation Cover
 
This add-on is highly recommended for new cars, as this is helpful to reduce the cost of depreciation applied against the replaced parts e.g. plastic/rubber, fiber, metal and paint material. Also known as nil depreciation or bumper-to-bumper cover, it leaves out the depreciation factor from the coverage, giving you the complete cover. It generally costs anywhere between 15-20% of the standard premium and proves to be hugely beneficial for all car owners.

 
Roadside Assistance
 
Suppose you are going for urgent work and your car runs out of petrol or gets a flat tyre, or your vehicle breaks down for some reason at a secluded spot -- in all such situations, you might have to go through unnecessary trouble e.g. spending extended hours on roads being stranded or finding appropriate solutions. Roadside Assistance add-on was devised keeping such situations in mind where the insurer comes to your help immediately. Even in the case where, by mistake, you lock your car doors without taking the car key out, your insurer will send an executive to your house to pick the duplicate key and deliver the same to you at the spot where you are stuck. This add-on also comes at a nominal cost of Rs 150 - 500, depending upon the IDV of your vehicle.

One of the most beneficial aspects of this add-on is that it is treated as a service and is not counted against claim irrespective of how many times you avail the benefit.

Engine Protection

A standard car insurance policy protects against any damage to the car engine caused due to an accident. However, if the engine and/or its child parts receive any damage due to water ingression and oil leakage, a standard comprehensive policy doesn’t support it. For instance, if you are outside on a rainy day where water gets into the engine of your car and damages it, a standard car policy would not give you the cost of its repair. Similarly, any damage caused to the engine due to the driving of the car without engine oil suffered due to any road bumps, will not be payable by your insurer. Since engine repairs cost a lot of money, anywhere between Rs 20,000 to Rs 50,000 for a medium-sized car, one must think of buying the engine protection add-on tailored specifically for engine damages caused due to water ingression and oil leaks. This add-on is a must-have insurance feature to save a substantial amount of money at a nominal premium cost of 0.15% to 0.20% of the Insured Declared Value (IDV).

 
NCB Protector
 
No Claim Bonus (NCB) is discount insurers give on the own-damage premium component of a comprehensive motor insurance policy for not filing any claim in the previous policy year. And the percentage of this discount keeps going up year after year till no claim is made. One can lose the accumulated NCB over the years even if you make a single claim in a policy period. Keeping in mind the interest of policyholders, insurers provide the NCB protector add-on which rewards the customers to keep a certain NCB till only a single claim is made during the policy year.

For instance, you have 35% NCB while buying a policy and you make only one claim during the new policy period. In principle, your NCB goes to Zero and would have been 45% if you would not have made any claim. But, in this case, at the end of next year's renewal, you will be eligible for 35% (same slab NCB) or 25% (lower slab NCB) depending upon how an insurer’s product is devised.

The important thing to note here is that you must renew with the same insurer at the end of next year in order to avail of the benefit of the add-on.

(The author is Head- Motor Insurance, Policybazaar.com.The views in the above article are the personal views of the author and do not reflect the views DNA)