Along with metropolitan cities, the demand of luxury cars has also increased in Tier-II and Tier-III cities in India. As per ICRA, the credit rating agency, there would be a tremendous growth in years to come, which will increase the sale of luxury cars to 10 lakhs by 2020.
With this growth, the niche-segment of luxury car insurance policies has also expanded. Though, the law mandates only third-party insurance cover, it is strongly advised to buy a comprehensive insurance policy along with riders to enhance your luxury car’s protection level. Last year, a super luxurious Lamborghini Gallardo, which comes at a price tag of Rs 2.7 crore, suddenly went up in flames in Delhi. Further, there are limited authorized repair workshops for luxury cars and the possibility of getting damaged parts repaired is also very low. Therefore, it is a wise decision to buy comprehensive car insurance policies with value-added features.
Over the last few years, motor insurance covers have become more comprehensive. Now almost every car insurer is offering a range of riders that are essential, especially for high-end vehicles. Here are some important add-ons that should be part of your car insurance policy.
Photo Credit: The Financial Express
1. Zero depreciation cover: Even a comprehensive car policy doesn’t offer 100% coverage at the time of claim settlement. The insurer settles the claim after deducting depreciation or normal wear and tear of the vehicle. But with zero depreciation cover, you are entitled to get the full claim amount. It means, if your car gets damaged following a collision, for instance, and you file for a claim, your insurer will cover the entire loss. Availing this cover would be useful when you need to replace high cost parts of your luxury cars.
2. Engine Cover: For a nation like India, where the onset of Monsoon means waterlogging and clogged roads, it becomes important to have an engine cover. Any damage caused to a vehicle due to hydro-static lock, which happens if one tries to repeatedly start a moist engine, is not covered under a regular car insurance policy. The cost of repairing an engine is quite high, and therefore, it is important to buy this cover to ensure that damages to your engine don’t burn a hole in your pocket.
3. Return to Invoice cover: The number of car thefts has increased in India, especially in Delhi. Further, luxury cars and SUVs are being stolen more as compared to low-budget cars like Santro and Maruti-800.
Buying a Return to Invoice cover will ensure that in case of total loss or theft, you will get the original invoice value, including tax and registration charges and not the Insured Declared Value (IDV) only. In case your vehicle gets stolen or damaged beyond repair in an accident, the insurer considers these cases as a ‘total’ loss and settles the claim, which is enough to replace your vehicle with a new equivalent car.
4. Consumable covers: By taking this cover, you don’t need to worry about damages caused to consumables, like lubricant, nuts and bolts, engine oil, brake oil or screws. The insurer will make a payout for such consumables which are usually not covered under a standard car insurance policy.
5. Garage cash cover: Once yousend your car to garage for repair, commuting becomes extremely cumbersome and you would probably have to rely on public transport. At this point, garage cash cover comes to your rescue. The insurer pays a fixed sum as an allowance towards hiring a public transport while the vehicle is under repair.
6. Key replacement: This add-on comes into play when you misplace your keys or they get stolen. Further, the insurer will compensate you for the cost of locks if the car is broken into.
7. Roadside assistance: Getting stuck on a road at an untimely hour is the worst fear of most of the car owners. Be it a punctured tyre, minor electrical fault or running out of fuel, anything can hinder your otherwise smooth journey. The roadside assistance offers some extremely helpful services, such as battery jumpstart, fuel refilling, and flat tyre change that could be of great help in case your car breaks down. Some car insurers provide it along with their motor insurance policies, while others offer it as a standalone rider.
8. Personal accident cover: This cover secures your family’s future in the event of your permanent disablement or death. You can get coverage for any loss or damage caused to the driver while travelling, mounting or dismounting from your car. There are some insurers which offer optional accidental covers for co-passengers also.
Points to consider before buying riders for your luxury car:
Adding riders to a regular motor insurance policy will add to the premium. If you already have, say a personal accident cover or sufficient life insurance coverage, it is not advised to buy similar riders as it will only be a duplication and wastage of money. However, if you don’t have these covers, it is strongly recommended to buy these riders instead of taking separate policies.
Some car dealers also offer riders to car owners. However, car dealers often get high commission for selling particular riders, and therefore, they might compel you to buy those riders against your wish. To avoid this, you should buy riders offered by insurance companies.
There will always be a difference in price because different insurers are specialized in different types of risk coverage. Therefore, if there is a particular type of rider you want, shop around to get a good deal.
The Bottom Line
Insurance add-ons or riders offer numerous benefits, thus, giving double protection to the luxury vehicle as well as to the owner from high repairing costs. Therefore, make sure to add them to your comprehensive car insurance policy. After all, your high-end car is worth it!