One insurance policy does not cover all your vehicle's needs

Vivek Chaturvedi

Ever heard of a doctor writing a prescription without thorough consultation? No, right? The same rule applies to insurance too. Asking the right questions has never been more important.

We live in a world of customisation. It is the next step to believing customer is king. Everyone these days wants to have something different from the next person. That’s the reason behind having so many different choices in a clothing store. The dress that one likes will usually never be as flattering to another. One style or one fit does not work for all.

And, when we are so particular about a simple selection of clothes, then shouldn’t that apply to our insurance policy as well? When it comes to your prized possession be it your car, or mobile, only the best customised solution should do.

Most of us refuse to ask questions beyond the basic need-to-knows. For example, everyone will want to know about premiums but while buying, no one will want to dig deep and know what all benefits the insurance policy can cover.

The first question that we should ask is what kind of coverage are we looking for? Let’s take a car insurance policy, for example.

We already know that as per Indian law, one cannot take a vehicle out on the road without a third-party insurance. This policy protects others involved in an accident that were caused, covering injuries and vehicle damage to the third party.

Apart from the mandatory third-party cover, one should also look at a comprehensive plan as such a plan will cover damages done by the policyholder as well. In fact, such a plan can be customised according to one’s car, where one stays, what has been the previous insurance history been like etc. with a few add-ons.

These add-ons may create a difference in your premium but you should also look at it giving a better protection for future, which is the actual reason for having an insurance in the first place.

Here’s a quick list of some of the add-ons which really make sense:

Roadside Assistance (RSA) aka Breakdown Assistance

All lot many times when a consumer’s car breaks down due to some reason, the instant thought that comes to mind is ‘Call/arrange for a mechanic’. This add-on covers things like towing, repair on spot, flat tire service, emergency fuel delivery, if car keys are lost or consumer has locked himself out, cab and accommodation services too these days in case consumer is stuck with a car problem in the middle of the night.

Parts Depreciation Cover (Zero Dep/ Bumper to Bumper)

Like everything in life, there is a decrease in value of certain parts of a car, including the bumper or any other parts. So, when there is any damage to a particular part of the car, the full cost of replacement cannot be given, as depreciation is deducted from the claim money. But, this add-on makes sure that there is zero depreciation and the customer gets the full value of the cost of repair/replacement, provided the vehicle is repaired at the authorised workshop partnered with the insurance company.

Engine and Gear-Box Protection Cover

If an accident causes a damage to an engine, it is covered under a standard package policy. But if it is a consequential damage, it is not covered. The cost of replacement of an engine is approx. 40 percent of vehicle cost. For example, if a car is towed roughly or the engine is turned on during floods which causes damage to the engine or gearbox, this add on comes to rescue, covering the repair charges. People driving in the horrendous rains in Mumbai and other areas in India during monsoon season should definitely look at this add-on.

Return to Invoice Cover

If a car gets stolen or it’s totally damaged or its repair cost estimated is more than 75 percent of its IDV, this feature helps cover the cost of buying a similar new car i.e. Avail the ex-showroom price or last invoice value, minus the IDV (Insured Declared Value). If you own a car which is less than 5 years old, this add-on will add a protective insurance layer to it.

As you can see there are a lot of new features that we can miss on capitalising just because we are not even aware they exist. Understanding your needs and requirements and then choosing the right insurance product will help save a lot of money and provide better protection in future.