Vehicle Damage Repair: What to do when your insurance does not cover the entire cost

Although a third party insurance policy is compulsory under the Motor Vehicles Act, 1988, it does not offer comprehensive coverage to the insured vehicle in case it incurs damages. This kind of insurance policy will only cover the damages incurred by a third party, which means that you will have to bear all the expenses associated with the repairs to your own vehicle in case of an accident.  Comprehensive motor insurance policies, on the other hand, are a better option as they provide coverage to the third party as well as the insured vehicle. It also provides coverage for lawsuits in addition to a variety of other aspects. A comprehensive insurance plan generally covers damage to the vehicle of the policyholder if the damage is caused by natural or man-made disasters. It also covers damages to the third party’s vehicle as well as hospitalisation costs incurred by the third party or the policyholder. 

  What is not covered by your motor insurance plan? 

If you meet with an accident, insurance companies usually only pay for a part of the overall repair costs. More often than not, policyholders will have to pay for a good part of the repairs from their own pockets. Due to the compulsory deductible, the policyholder will have to pay a pre-determined amount (based on the size, cubic capacity and class of the vehicle) from his/her own pockets when making claims.  A standard insurance plan does not cover depreciation either. Depreciation on certain replacement parts like rubber or plastic parts, tires, tubes, etc. will be deducted before claims are entertained by an insurance company.  

  What can you do? 

In order to get maximum coverage for your vehicle, you can go for optional add-ons. These riders, as they are also called, cover the extra costs that are uncovered by regular insurance plans. Here are some of the popular add-on covers you can opt for in order to enhance the coverage of your policy:  

  • Zero Depreciation Cover: In case of an accident, the insurance company subtracts the depreciation value of parts such as plastic and rubber parts, tires, tubes, wood, metal, fibreglass, etc. If you supplement your insurance policy with a Zero Depreciation Cover, you need not worry about such deductions. In case your vehicle incurs damages and you are equipped with this cover, the insurance company will settle the whole claim without taking depreciation of certain parts into account.  
  • Consumables Cover: In case of accidents, insurers do not cover the general consumables in your vehicle. These consumables include nuts, bolts, engine oil, coolant, pipes, etc. Depending on the extent of the damage, replacing these consumables can sometimes be as expensive as repairing the vehicle itself. Having a Consumables Cover in place will ensure that they are also covered by the insurance company. 

  • Return to Invoice Cover: If you have a comprehensive insurance plan, you will only be covered for the Insured Declared Value of the vehicle in case it is totally damaged. Depreciation will be taken into account and you will be reimbursed based on the IDV of the vehicle. Having a Return to Invoice Cover will ensure that you get paid the on-road price of the vehicle as compensation in case of total damage.  

  • Engine Protect Cover: Insurance companies do not usually cover repair and replacement costs of your engine. Having an Engine Protect Cover will mean that damages to your engine and its parts, be it pins and pistons, crankshaft, etc., will be covered by your insurance company. Moreover, the engine’s hydrostatic lock is not covered by regular insurance plans. This lock is caused by waterlogging and usually stops the engine from working altogether. An Engine Protect Cover will ensure that all parts of your engine are covered.  

  It is essential to understand the inclusions and exclusions of your motor insurance policy if you wish to make the most of it. Go through the riders as well and see if you can supplement a basic motor insurance policy with additional coverage as doing so can significantly reduce the costs you incur from your own pockets in case of an accident. 

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