Still think that motor insurance is all about giving you basic coverage? Well, it is more about offering protection for your needs, and add-on covers on the motor insurance elevate the experience. Whether it is zero depreciation or engine protection, the extras that are available with the motor insurance can save you from a lot of unexpected expenses, stress, and time.
If you are wondering, are they worth the extra cost, or who can actually opt for them, read this blog to learn more about add on cover in motor insurance in the simplest manner. So, scroll through and decide what truly fits your vehicle and your budget.
What Are Motor Insurance Add-On Covers and Why Do You Need Them?
Beyond ticking the legal compliance, motor insurances have evolved to ensure that when things go wrong, you are protected. Further, here is how add-on covers can help:
Understanding Add-On Covers in Motor Insurance
Commonly known as riders, these are the benefits that can be purchased along with your motor insurance policy. Optional in nature, they can deliver protection against the risks that are not covered in the standard coverage. For instance, a basic policy covers theft and accidents, but it does not cover depreciation cost, and here add-ons help. The addition of zero depreciation can offer you a higher payout.
Thinking about the engine damage of your car last monsoon due to waterlogging? Add-on covers include the repair charges of such issues, eliminating the burden of bearing the full cost.
Key Benefits of Add-On Covers
Yes! There are multiple benefits of add-on covers that increase the value of your standard policy. Whether it is about enhancing the financial protection or customising the coverage, they are known to reduce the expenses to be paid from your pocket during claims. Also, depending on your vehicle type, location, and driving habits, you can choose the extras to pay for only what you need.
What more? Add-on covers get you smoother and more comprehensive claim settlements; 20% to 30% higher claim payout as compared to policies without add-on covers. The biggest benefit? Peace of mind – when you know that unexpected, expensive costs will be covered, it makes a huge difference.
When Should You Consider Add-On Covers?
Do you know that the average cost of car repairs in India is increasing 10–15% annually? Yes! It is true; inflation and modern technology-inspired, advanced components have increased the expenses. In such situations, add on cover in motor insurance helps.
Some of the examples are:
- If you own a new or high-value car, where repair and replacement costs are higher
- If you frequently drive in flood-prone or high-traffic areas, increasing the risk of damage
- If you want maximum claim benefits with minimal deductions
- If your car has expensive parts or advanced technology like sensors, cameras, or hybrid systems
Remember, the add-on that caters to your lifestyle and budget can keep you financially protected and prepared.
Are Add-Ons Mandatory?
The answer is No. Add-on covers are options, but skipping them can incur loss during claim settlement. You can make a choice based on your risk tolerance, budget, and driving habits. If you rarely drive or own an old car, you can skip the add-ons. But in urban cities, they can deliver significant value to the vehicle owners, especially with new vehicles. In simple terms, add-ons are smart tools that help you leverage the true value of your motor insurance policy.
Popular Motor Insurance Add-On Covers: Cost and Benefits
Let us break down some of the most popular motor insurance add-on covers, along with their cost and benefits.
Zero Depreciation Cover
In standard policy, insurers take the depreciation cost of plastic, rubber, and metal parts, which reduces the settlement amount up to 50%. Zero depreciation add on cover in motor insurance eliminates the depreciation cost deducted on the replaced parts during the claim settlement. This is truly beneficial in the case of modern cars, where the materials and components are expensive.
The premium increases between 15% and 25%.
Engine Protection Cover
Most people know that engine repairs are extremely expensive, and they can cost up to ₹2,00,000 depending on the vehicle. Here, the engine protection cover add-on saves you from these expenditures. It covers damage caused by oil leakage, hydrostatic lock, and waterlogging. Cities like Bengaluru, Pune, Mumbai, Kochi, and more, this add-on is a blessing during the monsoon.
The premium rises to 10%.
Roadside Assistance Cover
Breakdowns do not come with a warning, and emergency issues like accidents, flat tyres, battery drainage, and low fuel require immediate help. The best part? Roadside assistance cover, ensure that the help is just a call away and available 24 hours, 365 days. Whether you are stuck on a highway or in the middle of a crowd, this add-on is all about reducing your stress and inconvenience. Thought of the last breakdown of your car crossed your mind? Well, it is a practical edition.
The cost of the premium increases up to ₹2000 annually.
Return to Invoice Cover
Do you know the value of your car can depreciate by up to 20% in the first year? Yes! It is true. If your car is stolen or totally damaged, the basic policy will only pay the insured declared value, which is quite less. However, the return to invoice add-on will help you recover the entire invoice value of the car, saving you from financial loss. It is a must have for new car owners and high value vehicle owners.
The premium rises by 20%.
Eligibility Criteria and Factors Affecting Add-On Selection
Here is how to choose add-ons that truly fit your vehicle and driving needs:
Vehicle Age and Type
When it comes to purchasing motor insurance add-ons, the age of your vehicle matters. In India, most insurance does not offer zero depreciation for cars older than 5 years, and engine protection is offered to vehicles up to 10 years old. Return to invoice is valid for cars 3 years of age. The reason? The older vehicles have higher wear and tear, which increases the claim frequency by 20 to 30%.
Insurer Policies and Terms
Different insurers, different conditions. Some add on covers in motor insurance can only be availed during the purchase of the vehicle and cannot be retained during renewal. Some are only available for older vehicles or specific models. IRDAI guidelines state that insurers have the flexibility to design the add-on, and this is the reason for the differences in terms and conditions across various insurers. The key is to read through the fine print; it is likely that a great add-on may come with limitations.
Cost vs Benefit Analysis
If you purchase add-ons, the cost of the premiums rises by up to 25%. It also depends on the number of add-ons you choose. The rule is to balance the cost of the add-ons with the benefits of the add-ons. Drive every day in traffic-prone areas? Zero depreciation and engine protection are worth buying. For minimal usage, keep the focus on value, not volume.
Claim History and No Claim Bonus (NCB)
The add-on choices are directly impacted by the claim history. A clean record can earn you a No Claim Bonus (NCB) of up to 50% on premiums over time. Options like NCB protection help you leverage this benefit, irrespective of the fact that you have already made a claim. The catch? Too many claims can limit your eligibility for a few covers while increasing the premiums. The low frequency saves your money and gives you great flexibility.
Conclusion
The add on covers in motor insurance are a smart way to upgrade your policy and stay protected against real-world risks. While they do come at an extra cost, the benefits often outweigh the expense—especially when you’re dealing with high repair bills or unexpected damages.
The key is finding the right balance between coverage and affordability. Once you understand the cost, benefits, and eligibility of each add-on, it becomes much easier to choose what truly fits your needs. With the right mix, you can build a motor insurance policy that not only protects your vehicle but also keeps your finances secure, especially when you make informed choices.
FAQs
1. Are motor insurance add-on covers worth the extra cost?
Yes, especially if you own a new or high-value car. Add-ons can significantly reduce out-of-pocket expenses during claims.
2. Can I buy add-on covers after purchasing the base policy?
Some insurers allow mid-term additions, but most add-ons can only be purchased during policy issuance or renewal.
3. Which add-on cover is the most important?
Zero depreciation and engine protection are among the most popular, but the best choice depends on your needs and driving conditions.
4. Do add-ons affect the No Claim Bonus (NCB)?
Certain add-ons, like NCB protection, help retain your bonus even after making a claim.
5. How many add-on covers should I choose?
There is no fixed number. Select add-ons based on your vehicle type, usage, location, and budget for optimal coverage.