Such schemes can help
you get full claim on the value of car parts that are replaced after an
accident, says Prashant Mahesh
Your regular motor insurance policy is of little use if
you have to replace plastic, glass or rubber parts after an accident. For
example, if the windshield of your two year-old car were to be replaced, you
may get only . 2,500 from the insurance company. A new windshield would cost
you around . 10,000. However, you can overcome this problem if you go for car
insurance with added benefits like zero depreciation, engine protection and
return to invoice. “Spare parts in high-value cars are costly. We recommend
people with cars costing upwards of . 10 lakh to go for add-on covers, as it
will lower their risk,” says Arvind Laddha, CEO, Vantage Insurance Brokers.
ZERO DEPRECIATION
This add-on cover
ensures that you will receive the full claim without any depreciation on the
value of parts that are replaced after an accident. “In case of a major
accident, a zero-depreciation policy could come in handy,” says Niraj Jain, CEO
& Principal Officer, Insurancemall — an online insurance portal. “Remember
to buy the zero-depreciation cover in the first year itself, as an insurance
company could deny it in the second or third year or ask for a heavy premium,”
adds Niraj Jain. If your bumper gets damaged and it costs . 15,000 to replace
it, most insurance companies would merely pay around . 7,500. However, if you
have a zero depreciation cover, you could get the entire amount back. Most
insurance companies offer it for vehicles that are less than three years old.
If you were to meet with an accident in an unknown area where a basic service
centre is far away, this add-on could be handy. “The
facilities included under this would include towing, repairing a flat tyre or a
battery, fuel assistance, taxi and accommodation benefits,” says Vijay Kumar,
chief technical officer, Bajaj Allianz General Insurance
ENGINE AND ELECTRONIC CIRCUIT COVER
During monsoon, chances
of flooding in many areas cannot be ruled out. If you start your car while it
is still submerged in water, the engine could get badly damaged. Since the engine is one of the
most crucial parts of a car, repairing it is a costly affair. Trying to start
the car repeatedly may cause further damage and it may finally break down. This
phenomenon is known as hydro-static lock, and as per experts, is one of the most
common reasons for vehicle engines to get damaged during monsoon. “Such damage
is not payable under a regular motor insurance policy. You may have to call the
towing agency or the insurer who can arrange to tow the vehicle. An add-on such
as engine protector may cover such specific claims,” says Vijay Kumar. Same is
the case with electronic circuits. “In case of water logging, it is not one or
two parts, but the entire circuit may need to be replaced. This cost could be
very high, and hence, an add-on policy which covers electronic parts could
help,” says Rahul Aggarwal, CEO, Optima Insurance Brokers.
RETURN TO INVOICE
This benefit is
available only in the first year of buying a car. In case the car is totally
damaged, 100% of the value of the vehicle (without deducting 5% depreciation)
is reimbursed.
NCB RETENTION
No claim bonus is a
reward for those policy holders who have not registered any claims against
their car insurance policy in the past. Over a period of time, this bonus can
be accumulated to claim a discount of up to 50%. However, even a single claim
on your policy can bring this down to 0%. By buying an add-on cover, this can
be avoided. Under this add-on, even if you have a claim, subject to a certain
sum, NCB earned by you remains protected at the current eligible percentage,
instead of becoming 0% under a normal policy,” says Banwari Lal Sharma, AVP
(Marketing), Carwale, an online automobile portal.
Many add-ons are bundled as a package by insurance companies. If you end up
buying all of them, your premium will increase substantially. “Understand what
you need the most and buy accordingly,” says Banwari Lal Sharma.
Source : Prashant Mahesh – Economic Times –
25/6/2013
