Beginner's Guide To Car Insurance

a) Engine Protect

In the normal course, a car insurance policy does not cover engine damage, unless it is totaled in a car accident. Most new premium cars, not just Audis and BMWs, in the INR 15 lakh+ bracket have very low engine placement. This increases the chances for engine damage manifold and sometimes makes it unavoidable, especially on the Indian roads and in the monsoon season.

Hence this is a very practical and handy add on to opt for, especially for premium cars whose engine repair costs are usually very high.

This should cost you less than 10% of the base premium.

b) Bumper To Bumper

An absolute must for relatively new cars, Zero depreciation add on or zero dep or nil dep as it is commonly called, is one of the most widely sold add ons.

If you have a base policy, you need to pay part of the claim, over and above the mandatory deductible amount that you pay on claim settlement on account of the car parts replaced. Plastic parts, tyres, tubes etc will be covered for only 50%, fibre glass will be covered for 70% costs etc. With zero dep, you get full reimbursement for the car parts replaced.

Most insurance companies offer zero dep add on to cars upto 3 years old. Some even give it for cars upto 5 years old. However, the cost of the premium keeps going up substantially and may not be the most efficient to buy for older cars.

This add-on would cost you in the range of 10-15% of the base premium.

24/7 Roadside Assistance

You can never know when trouble is around the corner. With Roadside Assistance, in case of an accident or breakdown you get the security of getting instant assistance in case of any roadside trouble. This Roadside Assistance provides technically trained advisors, 24 hours a day, 365 days a year, to ease your concerns resulting from unforeseeable emergencies.​ This should cost you around Rs 500.

Car Replacement/Invoice Cover

If you live in a theft prone area, you should invest in the Return to Invoice add on. Typically a new car is insured on the Insured declared value which is 5% less ex showroom price in new car, and not on the on road price that includes taxes, registration charges and dealer handling charges. With this feature, you insure your car for the ‘on road price' in case the car gets stolen or has total loss in case of an unfortunate major accident.

This should be a cost of about 10% of base premium.

NCB Protection

If you don't make a claim in the entire year, you get a discount on your premium at the time of renewal. This discount is called no claim bonus or simply NCB. This discount over the years can amount to a huge saving. The best part about NCB is that it is driver dependent, so even if you change your car, it can be passed on to the next car's insurance. However, even a single claim will set the NCB discount to 0. So you can opt for this add on that protects your bonus, in case you end up making one claim in a year. This protection is like a bonus life you get in a video game, so you can continue playing even if you lose once.

This should be a cost of about 15% of base premium.

Go ahead and buy one or more of these add ons and enjoy driving your car. Wish you safe travels!