Buying a new car is an exciting
milestone, but protecting it with the right insurance coverage is equally
important. While a comprehensive car insurance policy offers essential
protection, it may not cover certain real-world risks such as depreciation
loss, engine damage due to water ingress, roadside breakdowns, or total loss
situations.
This is where add-on covers in car
insurance become extremely valuable.
In this detailed guide, we will
explain the most important add-on covers for new car insurance, how they work,
who should opt for them, and how they enhance your financial security.
What
Are Add-On Covers in Car Insurance?
Add-ons (also called riders) are
optional benefits that enhance your base comprehensive car insurance policy.
They provide extended coverage against risks that are not included in a
standard plan.
A comprehensive policy typically
covers:
- Own damage
- Third-party liability (mandatory under the Motor
Vehicles Act)
- Fire, theft, and natural calamities
However, it does not cover
depreciation deductions, engine damage due to flooding, roadside assistance, or
consumables—unless you purchase specific add-ons.
1. Zero Depreciation Cover (Nil Dep Cover)
New vehicles depreciate quickly.
During a claim, insurers deduct depreciation on replaced parts such as plastic,
rubber, and metal components.
With Zero Depreciation Cover:
- No deduction on replaced parts
- Higher claim settlement amount
- Minimal out-of-pocket expenses
Ideal
For:
- Brand-new cars
- Luxury vehicles
- Cars with expensive spare parts
For the first 3–5 years of
ownership, this add-on is highly recommended.
2. Engine Protection Cover
Standard policies do not cover
engine damage caused by:
- Water ingress during floods
- Oil leakage
- Hydrostatic lock
Engine repair costs can be extremely
high.
Engine Protection Cover includes:
- Repair or replacement of engine parts
- Gearbox damage
- Differential assembly damage
Ideal
For:
- Flood-prone areas
- Metro cities
- High-value vehicles
3. Return to Invoice (RTI) Cover
In case of total loss or theft,
insurers normally pay the Insured Declared Value (IDV), which is lower than the
original invoice value.
With RTI Cover:
- You receive the original invoice price
- Registration charges and road tax may be included
Ideal
For:
- New cars (within 3 years)
- Financed vehicles
- Expensive cars
This add-on protects you from major
financial loss in total damage situations.
4. No Claim Bonus (NCB) Protection Cover
If you do not make any claims during
the policy year, you earn a No Claim Bonus, which reduces renewal premiums.
However, one claim can reset your
accumulated bonus.
NCB Protection allows:
- One or two claims without losing your NCB
- Continued premium savings
Ideal
For:
- Safe drivers
- Long-term policyholders
5. Roadside Assistance (RSA) Cover
Unexpected breakdowns can happen
anytime.
RSA provides:
- Towing service
- Battery jump-start
- Flat tyre assistance
- Emergency fuel delivery
- Minor on-the-spot repairs
Ideal
For:
- Frequent highway drivers
- New drivers
- Family travelers
6. Consumables Cover
Standard insurance does not cover
consumable items like:
- Engine oil
- Coolant
- Brake oil
- Nuts and bolts
- Lubricants
Consumables Cover reimburses these
small but frequent expenses during claims.
Ideal
For:
- New car owners
- Frequent repair situations
7. Key Replacement Cover
Modern vehicles use smart keys and
electronic locking systems that are costly to replace.
This add-on covers:
- Lost or stolen keys
- Lock replacement
- Labor charges
Ideal
For:
- Cars with advanced key systems
- Premium vehicles
8. Tyre Protection Cover
Tyre damage due to cuts, bulges, or
bursts is usually not covered unless caused by an accident.
Tyre Protection includes:
- Sidewall damage
- Tyre burst
- Bulges
Ideal
For:
- SUVs
- High-performance vehicles
- Rough road usage
Do Add-Ons Increase Premium?
Yes, but the increase is relatively
small compared to potential repair expenses.
For example:
- Zero Dep may increase premium slightly
- Engine Protection adds moderate cost
- RSA is usually affordable
The financial protection offered
often outweighs the additional premium.
Priority Add-Ons for New Car Owners
If budget is limited, prioritize:
- Zero Depreciation Cover
- Engine Protection Cover
- Return to Invoice Cover
- Roadside Assistance
These provide maximum financial
value for new cars.
Conclusion
A new car deserves complete
protection beyond basic insurance coverage. While a comprehensive policy forms
the foundation, add-on covers such as Zero Depreciation, Engine Protection,
Return to Invoice, and Roadside Assistance significantly enhance financial
security.
Selecting the right add-ons ensures
that unexpected accidents, breakdowns, or total loss situations do not cause
major financial stress.
For expert assistance in choosing
the right add-ons tailored to your needs, Square Insurance can help you compare plans and select the most
suitable coverage for your new vehicle.
Frequently Asked Questions
1.
Are add-on covers compulsory for new cars?
No, they are optional but strongly
recommended for enhanced protection.
2.
Can I add riders later?
Yes, most insurers allow adding or
removing add-ons at renewal.
3.
Is Zero Depreciation necessary for new cars?
Yes, especially during the first few
years when depreciation deductions are high.
4.
How long is RTI cover available?
Typically for cars up to 3 years
old.
5.
Do add-ons work with third-party insurance?
No, add-ons are available only with
comprehensive car insurance.
