Get the most out of your Car Insurance

No Claim Bonus (NCB) is an incentive for those policy holders who have not taken any claim against their car insurance policy in the previous years

March 24, 2014 2:52 IST | India Infoline News Service
Comprehensive motor insurance policy without Add-on covers, in reality is not comprehensive in its true sense. If motor insurance policy holder has to pay from his wallet (partly or fully) for replacing rubber or metal parts in case the car met with an accident, then the entire purpose of insurance gets defeated. One can overcome this if motor insurance is bought with some very useful add on covers like Engine protection, Road side assistance, Protection for no claim bonus, Nil depreciation, Return to invoice and Personal belongings. Furthermore, spare parts in high-end cars are very expensive. It is recommended that cars valued upwards of Rs. 8-10 Lacs should have Add-on covers as part of the motor comprehensive policy. This reduces the financial impact on the car owner in the event of a claim.  

How add on covers can help get the most out of your Car Insurance:

No Claim Bonus Protection

No Claim Bonus (NCB) is an incentive for those policy holders who have not taken any claim against their car insurance policy in the previous years. Over a period of time, NCB can be accumulated maximum up to 50%. However, even one claim on the policy can bring this down to zero. NCB cover ensures that even if claim is made, NCB earned remains protected at the existing eligible percentage, instead of becoming zero. This should be a must get ‘add-on’ for all vehicle users.  After all, one bad day on road should not spoil your safe driving record of years!

Return to Invoice

Generally this benefit can be availed only in the first or second year of buying a car. In the event of a Total Loss following an accident or when the insured vehicle is stolen and not recovered, the Insurance Company will pay the financial short fall, if any, between the amount insured and the purchase price of the vehicle or current replacement price of the new vehicle, whichever is less.  It is wise to be prepared.

Nil depreciation

This ensures full claim settlement without any depreciation on the value of spare parts that are replaced after an accident. Like, if bumper gets completely damaged and it costs           Rs. 20,000 to replace it, insurer may have to pay around Rs 10,000. However, with Nil Depreciation cover, the car owner gets the entire amount back. It is mostly available for vehicles that are less than three years old. So, your car parts may depreciate, but your claim value need not!

Road side Assistance

This is to receive basic support in case of any road side emergency. This includes fuel assistance, flat tyre, battery, towing or an alternate car for a certain period. Emergency Road side Assistance is all about buying peace of mind. 

Engine Protector

During heavy rainfall if vehicle is submerged in water/ flood, on starting, the engine could break down. This occurrence is known as hydro-static lock and it is frequent during monsoon. Many car owners make the mistake of starting their vehicle when it is submerged in water.  The repair cost is very high and therefore an add-on cover which protects the engine from such occurrence could help.

It is therefore, strongly recommended to buy add-on covers while buying the motor comprehensive insurance policy. A good combination of add-on covers will truly make your Car Insurance a “Comprehensive” one.

The author is Vice President & Head of Retail business, SBI General Insurance

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