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How do I choose motor insurance policy for a new car?


I have recently bought a new car & want to buy a comprehensive motor insurance for the same. What are the must have add-ons I should look at buying apart from the regular qwn damage (OD) and third-party (TP) insurance?

– Pornima

It is good that you are not sticking to a basic OD+TP policy but are looking to buy comprehensive protection for your new car. Insurers offer a range of optional add-ons that give additional cover to your car along with the base motor insurance policy. It is noteworthy to look under the hood of these additional covers to understand their offer and how they work. Some of these covers are useful and don’t cost too much. Also, when someone opts for comprehensive insurance coverage, it does not provide full coverage for several different degrees of damages. One should seek to add on covers vis-a-vis the risk exposure.

Return to Invoice: This ensures that the insurance company receives the original value of the car as per the invoice, ex-showroom car price at the time of purchase & the registration & road tax paid. In a nutshell, the ROI add-on bridges the gap between the car’s invoice Value & the insured declared value. This add-on should not be used to file a claim for minor repairs or damages. It is majorly used to recover the financial loss of a stolen car or to protect against a scenario of irreparable damage.

Zero Depreciation Cover: Zero depreciation is also known as bumper-to-bumper or nil-depreciation cover & it is highly recommended for new cars. It helps reduce the depreciation cost applied to replaced parts such as plastic/rubber, fiber, metal, and paint. It leaves out the depreciation factor from the coverage, giving you the complete cover.

Roadside Assistance: The Roadside Assistance add-on was created with such situations in mind, where the insurer comes to your rescue right away. Situations like tyre puncture, even if you accidentally lock your car doors without taking out the key. One of the most vital aspects to consider in this add-on is that it is treated as a service & is not counted against your claim regardless of how many times you may use it.

Engine Protector Cover: Any standard car insurance plan covers damage to a car engine caused by accident. However, if the engine and/or its child parts sustain damage as a result of water ingression and oil leakage, a standard comprehensive policy will not cover it. Because engine repairs are expensive, ranging from 20,000 to 50,000 for a medium-sized car, one should consider purchasing an engine protection add-on designed specifically for engine damage caused by water ingression and oil leaks.

The query is answered by Sanjiv Bajaj, joint chairman & MD, Bajaj Capital Ltd.

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