If you’re buying a car this festive season, insurers offer a huge variety of additional features and protections for a small extra fee. These ‘add-on’ covers give much greater protection from damage and third-party liability than a standard vehicle insurance policy.

Nil Depreciation/Zero depreciation

A standard insurance only entitles you to the depreciated value of parts, not the sticker price of a new part (depreciation is the fall in the value of the part over time), but zero-dep/nil dep lets you claim the complete cost of replacing damaged car parts with brand-new parts. This cover usually applies to newer vehicles, sometimes up to five years old, and for a maximum of one or two claims in the policy term.

Return to Invoice

In case of total loss or theft of the car within the first two years, insurers usually reimburse only the depreciated value of the car (i.e. about 20% less by the second year). The Return to Invoice add-on ensures that customers are reimbursed the invoice price plus registration charges, not the depreciated resale value. This add-on is only for situations in which the car is stolen or damaged beyond repair.

Engine Protect /Engine Guard

The engine and circuits are the most expensive parts of your car to replace/repair, but standard motor insurance does not cover non-accident-related breakdowns. The Engine Guard add-on covers breakdowns and many otherwise excluded engine/circuit repairs e.g. repairs for hydrostatic lock. The add-on is typically available for cars up to three years old, but can’t be claimed for damage due to normal wear-and-tear or policyholder fault.

NCB Protection

NCB is a renewal premium discount (up to 50%) given as a reward for having filed no claim in the previous period. But even one small claim can wipe out your NCB. NCB Protection preserves NCB even after a claim. It is applicable only to own damage premiums, not third-party liability premiums. NCB Protection covers only one claim a year (any more claims and the NCB is automatically void), and unlike the NCB itself, it cannot be transferred. Very few companies offer NCB protection, SBI General being one of them!

This add-on reimburses you for the expense of finding alternative transport if your car is damaged/stolen. The amount could be as much as Rs. 1,000 per day, depending on the make and age of your car, and the coverage could last as much as two weeks. This add-on may not be available for short repairs of a couple of days, and it is important that you give the car to a company (SBIG) empanelled service centre.