If you think everything damaged with your car is claimable then you need to read further

The recent Mumbai floods saw many stranded and damaged vehicles. It also made many realize that all kinds of damages may not be covered under the car insurance policy which one takes. It is a good idea to spend some time understanding what gets covered and what doesn’t. Read on as we try to cover the basics.
Rakesh filed a claim for his car engine being stalled as water entered the engine through the hydraulic lock; little did he realize that this comes under mechanical or electrical breakdown and therefore not covered under standard motor policy. Had he opted for add-on cover of engine protection he would have been covered.
It is important to understand the add-on covers and add those to your policy as per your requirement. Just going for a standard policy may not serve your purpose always. Add-on coverage can improve the value of your car insurance plan provided you make wise choices.
So, how to take the perfect car insurance policy?
While buying a vehicle we spend large amount of time and energy in choosing the vehicle but we generally don’t do the same while buying insurance policy for the same. And this is the reason that we often end up not having adequate protection or cover in case of any damage. It is a good idea to compare various insurance products and also understand the terms and conditions well.
A motor insurance cover generally offers two types of policies: liability only and package policy. Liability is mandatory and it does not cover damage to your vehicle. It is wiser to go for package policy which includes liability along with damage to owner’s vehicle and is called O.D cover.
Third party insurance is mandatory as per the Indian Road Safety Act and Indian Motor Vehicles Act. It provides you cover against damages caused to any third person, vehicle or property, but you cannot seek any claim for damage caused to your own self or your vehicle. Go for comprehensive cover that will protect you against damages caused to you and your car in an accident. It will also protect you against fire, theft etc. as per the plan you opt for.
But in spite of opting for comprehensive coverage often our claims are rejected and that is because we miss out on add-ons. Based on your requirement you buy add-ons for your car insurance. Sometimes these add-ons help you save huge amount of money.

ZERO DEPRECIATION – This add-on entitles you to claim full cost of replacing damaged car parts; in case of standard policy only the depreciated value of car parts is reimbursable and not the replacement value.
ENGINE PROTECT – Engine protect helps when engine fails due to other natural calamities like floods. Basic policy does not cover this so with this add-on you can enhance your coverage. It generally covers damages like leakage of lubricating oil, gear box damage, damage due to water ingression etc. The scope of coverage varies from company to company so it is better if you read the policy carefully before you invest. This add-on is especially advisable for people living in flood prone area or if you have a high-end car.

RETURN TO INVOICE – RTI is an add-on option which covers the gap between the insured declared value and the invoice value of the car. The cost of the RTI is usually 10 per cent more than the standard policy and is offered by insurance providers till the vehicle reaches a predefined age limit.
QUICK ASSISTANCE OF ROAD – Quick assistance of road add-on enables basic services in case of an emergency while driving through a remote location. Such add-on policies can get fuel assistance, taxi and accommodation benefits when stranded in a remote destination. While some companies offer this service for small fee i.e. as an add-on insurance cover, others offer it as an in-built component of the base policy. Some companies extend this cover only for renewed and not fresh policies.
NO-CLAIM BONUS PROTECTION (NCB) – No-claim bonus (NCB) is a discount in premium offered by insurance companies if a vehicle owner has not made a single claim during the term of the motor insurance policy. This NCB starts at 20% and increases annually with every claim-free year up to a maximum of 50%. It directly translates into lower premium for the subsequent year. NCB add-on allows you to retain your accumulated no-claim bonus even if there is a claim, helping you preserve the discount available on subsequent year’s premiumPERSONAL ACCIDENT COVER – This add-on covers both owner as well as paid driver.
Several insurers offer this add-on, which, like any other personal accident cover, provides lump-sum compensation to the passengers insured, in case of death or permanent total or partial disabilities suffered during accidents.
Normally, the maximum sum assured under this add-on plan is around Rs 1 lakh per insured but may vary from insurer to insurer.

LOSS OF PERSONAL BELONGINGS – Loss of personal belongings add-on lets users report claim due to theft or apparent loss of personal belongings including laptop or electronic equipment from a locked vehicle.

DAILY ALLOWANCE – This add-on cover compensates you for the cost of hiring an alternative vehicle if your car is stolen or is under repairs. The amount could range from Rs 500-100 per day, depending on the car model.
The number of days for which the allowance is handed out can range from 10-15 days. However, depending on the insurer’s terms and conditions, this add-on cover is subject to certain exclusions too. This add-on is a unique concept and advisable to take.

KEY REPLACEMENT COMPENSATION – This add-on comes into play if you happen to misplace your keys or they get stolen.
The insurer will also compensate you for the cost of replacing your lock and key if your vehicle is burgled.
In case of the latter, however, you will have to produce the police complaint registered for the break-in which is mandatory and required as per rules.
Most of us are not aware of this add-on which is quite beneficial.

CONSUMABLES COVER – Another very beneficial add-on.
One can buy this add-on if one wishes to seek compensation for money spent on nuts and bolts, screen washers, engine oil, bearings and so on, in case your car meets with an accident.
The insurer will make a payout for the value of such consumables replaced which are normally excluded from claim amounts under standard motor insurance.
Generally, vehicles older than three years are not eligible for this add-on cover.


In the recent Mumbai flood many cars got damaged but very few could get their claims settled as many things were not covered in the standard insurance policy. We asked Swetank Shantanu, co-founder and partner of New Delhi based law firm Legal Consultus with around 18 years of professional experience in the field of Banking and Civil matters to advise our readers on how to be better protected and covered.
It is advisable for each and every person who is taking car insurance policy to go for the add-on cover some of which have been mentioned above. For instance, Zero Depreciation, Return to Invoice, Engine Protect, Personal Accident Cover, Quick Assistance of Road, No claim Bonus Protection, Loss of personal Belongings, Daily Allowance, Key replacement Compensation, Consumables Cover.
The benefits of these add-on covers are immense and one learns the importance of these add-on covers if faced with odd situations like the one that happened in Mumbai recently. Even otherwise, these add-on cover would always ensure your safety for all practical purposes.
As a matter of general practice, however it is often found that the car insurance policy is taken as a mere formality and one is guided by the amount and premium involved instead of the large scale benefit involved while going for add-on cover.
In most of the cases, it has been found that people are not even aware of the various add-ons and even if the agent tries to explain the importance of add-on cover, he is simply brushed aside without giving any serious thought about the same. In fact, if these add-on covers are also bought, it always helps when a claim is made as reimbursement becomes quite easy and comfortable.
It is advisable to get car insurance done after going through each and every detail as provided by the respective company of which the insurance is sought to be taken and person getting the insurance done must do a reality check and take the policy after fully understanding the basic tenets of the same. Add-on should also be bought after going through the terms and conditions of the same as the same would help in case of claim being made.
Including add-on covers in your car insurance policy might require few more pennies from your pocket, but it would mean a complete financial security towards loss or damage of your car.
A Motor policy is usually valid for a period of one year and has to be renewed before the due date. Pay the premium on time. No Insurer offers a grace period for paying the premium. In case of lapse of policy by even one day, the vehicle has to be inspected. Moreover, if a comprehensive policy is allowed to lapse for more than 90 days, the accrued benefit of NCB (No Claim Bonus) is also lost.


The damages to the vehicle due to the following perils are usually covered under OD section of the Motor Insurance policy:» Fire, Explosion, Self- Ignition, Lightning

» Burglary/Housebreaking / Theft

» Riot & Strike » Earthquake

» Flood, Storm, Cyclone, Hurricane, Tempest, Inundation, Hailstorm, Frost

» Malicious Act » Terrorism acts

» While in Transit by Rail/ Road, Inland waterways, Lift, Elevator or Air» Land slide / Rock slide


The following contingencies are usually excluded under the Motor Insurance Policy:» Not having a valid Driving License

» Under Influence of intoxicating liquor/ drugs

» Accident taking place beyond Geographical limits

» While Vehicle is used for unlawful purposes

» Electrical/Mechanical Breakdowns.