Car insurance: Add-on options can save your vehicle from monsoon damage

It is important for policyholders to understand that standard car insurance policies might not provide adequate coverage for specific monsoon-related perils

It is that time of the year when standard, comprehensive car insurance would not be enough to fully protect your vehicle against monsoon-related damages.Excessive rainfall brings along monsoon-related problems like waterlogging, traffic congestions, vehicles breaking down etc and motor vehicles are the biggest victims of the downpour.

Depending on the insurance policy, the insurance cover protects your car against the different damages. However, damages to the engine are not covered even under a comprehensive plan. That’s when you need to buy add-ons. Add-ons are additional yet optional policy features that enhance your policy’s coverage to include those perils that otherwise are not covered by a standard car insurance policy.

"With the onset of the monsoon season, the possibility of motor vehicles being damaged due to breakdowns or engine failures because of water ingression, slippery roads, hydroplaning, accidents resulting from reduced visibility, water logging and damage from falling trees or landslides is high. It is important for policyholders to understand that standard car insurance policies might not provide adequate coverage for these specific monsoon-related perils," said Neel Chheda, Senior Executive Vice President & Head - Auto & Actuarial Analytics, Tata AIG General Insurance. 

Here are the different add on policies car  owners can explore
 

Get the engine protector add on: "Primarily, it is essential to opt for an engine protector add-on as damage to the car engine is a costly affair.  This add-on guards your vehicles’ engines against losses due to liquid or water ingress or hydrostatic lock. It covers the replacement cost of the damaged engine parts, especially when the vehicle is submerged in water, said  Nitin Kumar, Head - Motor Insurance, Policybazaar.com.

"The repairs for the engine may run into lakhs since it is the heart of your car. With an engine protection add-on, these repairs to the engine, either due to water ingression or leakage of other lubricants damaging the engine and its related components like camshaft, engine block and more, are covered by the add-on cover thus, saving your hard-earned money. Not just repairs, but also the replacement of crucial engine-related components is covered under this add-on," explained Bajaj Allianz.

 This feature is strongly recommended for areas which are prone to flood and waterlogging like Kolkata, Mumbai and Chennai.  

24x7 Roadside Assistance add-on:This cover is useful in  times of road emergency. This provides support with a vehicle towing facility in a waterlogged area. It also ensures that mechanical help reaches the policyholder on time and that their vehicle’s issues are fixed at an affordable price, explained Kumar. 

A 24X7 roadside assistance (RSA) cover can be purchased to help you jump-start your vehicle or even tow it to the closest service garage. In addition, the RSA cover aids by providing emergency fuel, alternate key facility and even accommodation in some cases.

"The Road Side Assistance cover povides support to the customer in case of Break-down of the vehicle and provides on-site repair, Towing, alternate travel facility, fuel procurement support etc as per applicable plans.Price of Engine protect cover depends on the insured declared value of the vehicle along with other factors. Prices of Road Side Assistance cover cover may vary from as low as Rs. 199/- to more than Rs. 1000/-  as per the plans opted. The benefits of these add-ons are very high in terms of value they provide compared to the price," said  Gaurav Arora, Head Corporate Underwriting & Claims at ICICI Lombard.

Zero Depreciation add-on: A must-have add-on during monsoon as it saves out-of-pocket expenses. The car owner can get full reimbursement for vehicle damages without accounting for the depreciation of the vehicle or its plastic, rubber and fibre parts. While zero depreciation covers all the vehicle components, there is 50% coverage for batteries, tyres and tubes.


Return to invoice add on: If  the insurer finds that the vehicle is beyond repair due to cyclone, waterlogging or thunderstorm then the policyholder can claim the original invoice value of the vehicle instead of its depreciated value, said Policybazaar's Kumar.

In case of theft or damage beyond repair, Return to Invoice Cover helps you claim the complete amount mentioned on the car's invoice value. In this case, ACKO will compensate you with the amount written on the invoice, which includes car registration cost and road tax as well.

Comsumables add on: Expenses like brakes, engine oil, nuts and bolts, etc, are usually excluded from a standard comprehensive plan. However, they may drive up the cost of repairs in case of damage due to flood waters. If an unfortunate accident occurs, the third-party vehicle isn’t the only one that is damaged, it is your car too. While your policy covers the larger spares that require replacement or repair, the smaller spares like nuts and bolts in aggregate add-up to a significant amount which otherwise is required to be paid for. With a consumables cover, these costs are also covered by the insurance company thereby offering a complete protection for the cost of repairs, explained Allianz.

"Consumables such as engine oil, lubricants, gearbox oil, screw, nut and bolt, grease, distilled water, bearings, oil filter, etc. are not covered under the Standard Comprehensive car insurance policy. By including the Consumables add-on cover, you can reduce the cash outflow from your pocket while settling the repair bill," said ACKO.

Add-ons imperative for those living in coastal and flood-prone areas

"For individuals residing in coastal and flood-prone locations, it becomes even more crucial to consider and opt for comprehensive protection. We recommend policyholders to ensure they have a valid motor insurance policy, carefully evaluate their needs and opt for appropriate add-ons. Some key add-ons to consider when selecting a motor insurance policy include engine Secure, tyre Secure cover, roadside assistance, consumables cover, and return to invoice cover, emergency transport and hotel expenses, and personal accident cover for own and for co-passengers," said Chheda.

Do add-on covers affect the car insurance premium amount?

Yes. It slightly increases the premium amount of the Standard Comprehensive insurance policy since you can take advantage of the wider coverage.

Approximate price for a popular car like a 5-year-old Wagon R (1061 CC) with Rs 2.5 lakh cover:

1. Zero Depreciation - average Rs. 2250 (Rs. 1500 to 3000)

2. Engine Protector - average Rs. 400 (Rs. 300 to 500)

3. 24x7 Roadside Assistance - average Rs. 150 (Rs. 100 to 300)

4. Daily Allowance - average Rs. 1250 (Rs. 1000 to Rs. 1500)

Source: Policybazaar

 

The above prices are on top of the comprehensive policy premium.
 

"One thing to note is that these add-ons are priced differently from insurer to insurer, depending on their claims data and customer profiles. Some insurers may price flood-prone areas very highly, while others can price them moderately depending on vehicle and customer history," said Policybazaar's Kumar.

Is there a different claim procedure if you buy these add-on covers?

The process remains similar to raising claims under the Standard Comprehensive car insurance policy. You will have to follow the procedure mentioned by the insurance company for any claim during the policy period.

Why is an add-on cover important?

While the third party plan covers you for injuries to someone else and damages to their property, the Own Damage plan covers liabilities arising from damages to your car.  However, the Standard Comprehensive car insurance does not provide additional coverage such as engine-related repairs, breakdown in the middle of a road, etc. "For example, the Zero Depreciation add-on cover does not consider the depreciation value of the car parts replaced or repaired while settling claims. With this add-on, you can avoid paying from your pocket," said ACKO Insurance.