Car Insurance: Check out the riders

Consider this - you buy a brand new car,take it out for a spin and someone hits your car from behind. The first thought to cross your mind would be how much will it cost? And then you would think; is the damage irreparable?

Written by Akshay Mehrotra | Published:January 16, 2012 2:29 am

Consider this – you buy a brand new car,take it out for a spin and someone hits your car from behind. The first thought to cross your mind would be how much will it cost? And then you would think; is the damage irreparable?

A car insurance is an arrangement between the insurer and the vehicle owner wherein,the insurer provides coverage against any financial loss happening because of damage to the car. This is applicable in situations where the damage has been caused either through an accident or because of any natural calamity or any liability that could result as a part of accident or theft.

Two types of car insurance policy

Third party liability policy covers you against any legal liability resulting from accident of your vehicle. The coverage includes death,injury or property damage to third party. This cover does not include damage to the vehicle. A third party liability cover is legally mandatory in India under the Motor Vehicles Act.

Comprehensive package policy comprises 3 things. Firstly,damage to your vehicle,i.e.,any loss or damage caused to your vehicle or its accessories due to natural and manmade calamities as defined in the scope of coverage; secondly,a third party legal liability cover and lastly,a personal accident cover to driver (owner) of the vehicle.

In the year 2010 a few insurers also added a host of additional rider benefits which allowed the customers to add a few extra protective gears to their car insurance policies. Each of these riders have their own unique selling proposition (USP) and help you get more out of your policy at a little extra cost.

Depreciation shield

In case of a partial loss to your car,the insurer promises to cover the depreciation amount on the damaged parts which are allowed for replacement. For example,for a mid-sized car like a Ford Fiesta,a zero depreciation cover would cost a consumer R 2,500 (approximately) for a new car.

24×7 spot assistance

Driving through a crowded road and getting stranded due to a flat battery,flat tyre or a minor repair can be a troublesome issue. 24×7 spot assistance helps you resolve all such queries and fuel assistance in some cases.

In addition to this,you also get towing facility,legal advice,medical co-ordination,accommodation benefits and taxi benefits in case of immobilisation of your car.

It is also one of the cheapest riders available to a consumer for R 365 only.

Engine protector

In case the engine of your car gets stalled due to either water ingression or leakage of lubricating oil resulting from an accident or as a result of damage to the gear box due to leakage of lubricating oil resulting from an accident,the insurance companies ensures that your claim is settled as per the normal procedure. In case of a standard policy,your claim would have been rejected.

Vehicle replacement advantage

If your car gets stolen or is damaged in a bad accident or a natural calamity,this rider helps replace your car with a new equivalent or near equivalent car of similar make,model,features,specifications and colour.

Though on the face of it,every rider might look important and handy,a careful thought regarding the same will let you know what your actual requirements are. Car insurance you from being financially responsible for an accident; it is a ventilator support which your car lives on.

—Author is Chief Marketing Officer,Policy Bazaar

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