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Your motor insurance policy will not pay the full cost of vehicle damage repair; Know what you can do about it

Priyadarshini Maji
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As per the Motor Insurance Act, only the third-party motor insurance cover is mandatory in India. This insurance plan provides coverage to the third party. It includes any legal liability brought against the third party vehicle s owner, including death or physical injury to a third party. While the third party cover includes damages caused to the third party property with the involvement of the insured vehicle, it doesn t provide coverage for any damage done to the insured vehicle. The policyholder or the policyholder’s car does not get any protection under this cover.

Comprehensive insurance plans, in that case, come to the rescue. In addition to the benefits of third-party cover, it provides cover towards loss or damage of the insured vehicle. With this policy, you do not need to have a third-party insurance cover separately, as it covers damages caused to your own car during an accident, along with the third party damage. Experts say comprehensive car insurance policy is the package insurance cover that you can get for your car. It also covers lawsuits, including legal fees brought against the policyholder as a result of an accident. General inclusions in a comprehensive insurance cover include damage to the policyholder’s vehicle caused by falling objects such as road-signs and trees, damage caused by natural disasters, flood, theft, vandalism, fire, damage to the third-party, and damage caused by an act of civil disturbance are also covered.

What your motor insurance policy will not pay for?

In case of an accident, even with the standard motor insurance policy, while filing own damage (OD) insurance claim, the insurer pays only a part of the total cost of repair. Most times the policyholder has to shell out the remaining amount their own pocket. The policyholder faces this problem even with a standard motor insurance policy because of the mandatory deductible. It is applicable in all the motor insurance policies irrespective of the insurance company you are dealing with. This means a pre-specified amount depending on the vehicle size, class, and cubic capacity, that is decided at the time of buying the policy, needs to be paid by the insured of every claim out of his/her own pocket.

Also, a normal standard motor insurance policy covers damages to the vehicle after deducting the depreciation. Depreciation on some replacement parts such as plastic, rubber parts, tubes, and tires, etc., is deducted. Based on the age of the vehicle, depreciation is applied, to the respective part’s value during a claim settlement.

What are your alternative options?

Alternatively, opting for add-ons or riders along with the base policy can help you get everything covered for your vehicle. The add-on covers the additional expenses that are not covered in a normal standard policy. Experts say policyholders should make sure to check what all are covered under their motor insurance policy when opting for it. With add-ons along with your base cover, you can protect yourself from paying for hefty engine repair costs.

– Zero Depreciation: The standard motor insurance policy generally deducts the depreciation value of a vehicle, such as parts like fiberglass, metal, wood, and the remaining amount is paid for the repairs. With a zero depreciation add-on cover, if your car gets damaged in a collision, you will receive the entire cost from the insurer. With the zero depreciation add-on, the depreciation value is not treated separately by the insurance company, and in case of an accident, the insurer will pay the total repair bill without deducting the depreciation. Generally, a motor insurance policy that comes with zero depreciation cover which costs more, as it offers complete coverage without considering depreciation so it charges a slightly higher premium than a comprehensive policy.

– Consumables Cover: The insurance company will not pay for the consumables used during the repairs with a comprehensive insurance policy. General consumables in a vehicle are not covered under the basic insurance policy, such as nuts, bolts, pipes, engine oil, grease to AC gas, coolant, and ball-bearings. If the damage in itself is larger, these consumables may cost the policyholder a lot. For instance, repairing normal frontal damage can use around Rs 1,500 worth of consumables. However, for repairing or replacing the engine, the expenses can shoot up to Rs 7,000 Rs 8,000. With a consumables cover, the policyholder would not have to pay for consumables used in the repairs.

– Engine Protect Cover: With an engine protect cover add-on, the insurance company will settle the entire amount for engine repairs or replacement. Without an Engine Protect Cover, if you file a claim for engine damage with just a comprehensive insurance policy, your motor insurance will not cover the repair or replacement costs for the engine. For instance, to repair or replace engine parts of a standard hatchback, like piston and pins, crankshaft, block, and head assy cylinder, can cost around Rs 1 lakh or more. With a comprehensive car insurance policy, the policyholder has to pay the entire repair costs out of their pocket. Also, the basic motor insurance policy does not cover the hydrostatic lock of the engine, which arises due to waterlogging and the car engine stops working. However, if you want to get this covered, you can opt for an engine-protect add-on cover.

– Return to Invoice Cover: While filing a claim for the total damage of your car with a comprehensive car insurance policy, you will get only a partial amount. Under a comprehensive motor insurance policy, the policyholder gets paid as much as the IDV, which is the depreciated value of his/her car for that year. A vehicle is considered totally damaged or lost when its estimated repair costs exceed 75 per cent of its Insured Declared Value (IDV). To get the full amount for your vehicle, you need to file a claim for total damage with comprehensive motor insurance along with a return to invoice cover. With this cover, the insured will be paid as much as the on-road price of his/her vehicle in compensation. The on-road price of a car includes the ex-showroom price, registration costs, and road tax. Most insurance companies offer a return to invoice add-on cover for only cars under 3 years of age.