Tata-AIG General Insurance recently launched eight add-on motor insurance covers. These include depreciation reimbursement, daily allowance, return to invoice, loss of personal belongings, emergency transport and hotel expenses and key replacement. Before opting for one, though, it is important to thoroughly analyse your needs and features of the add-ons, as the premium that some entail may not be commensurate with your requirements.

Depreciation reimbursement

cover offers to discharge the full claim, without any deduction for depreciation on the value of parts replaced. Available for vehicles up to three years old, this add-on will take care of a maximum of two claims during the policy period. The additional premium that one will have to pay to buy this cover, when you renew your policy, works out to Rs 1,064 (for a Hyundai Santro Xing GLS, with a no-claim bonus of 20%, etc). Availing of this add-on would be of help, particularly, if you need to replace high-cost parts such as the front glass.

Return of invoice cover

offers to pay the difference between your car's (those up to three years old) 'claim amount receivable' under the basic policy, and the 'purchase price of vehicle' as mentioned in invoice, in the event your four-wheeler suffers major damage and is declared a 'total loss' or a 'constructive total loss'. Do note, however, that if the same model is available at a lower price than the purchase price, the lower price will be taken into account.

For instance, if your market value is around Rs 2.5 lakh and a new car of the same make is available for Rs 3.5 lakh, the cover will arrange for the difference, which means that in return for an annual premium of Rs 1,835, your total claim will be nearly capable of funding a new purchase.

The other cover entailing a sizeable premium amongst the six add-ons, daily allowance (Rs 1,064 for the car with specifications mentioned above), may not be of much help when the commuting time/distance is minimal or for those who use their car sparingly.

Under this cover, the company pays a fixed sum towards the cost incurred in hiring an alternative mode of transport when the vehicle is under repair. However, for your claim to be considered valid, the repair time has to exceed three days, and the cover is valid for a maximum of 10 days (15 in case of total loss/theft claims). For instance, if your car is under repairs for six days and the amount spent on commuting is Rs 350 per day, you will be reimbursed to the extent of Rs 1,050, making the add-on premium seem like a needless expense. The other three covers involve nominal premiums running into a few hundreds, and one would need to take a call.

Why go for it:

Certain attractive add-ons, plus benefits like free car wash, discounts on servicing, discounts on spare parts, etc, at Tata AIG authorised garages.

What is the catch:

Some add-ons such as daily allowance may not mean much for car-owners whose commuting time is minimal, or those who use their cars sparingly.

To understand the nuances of different types of policies and its price, feel free to seek the help of InsuranceMall to select the right products based on your need. Or you can directly call them on +91-22-30503050

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