Are car insurance riders in India worth paying for?

Insurance

oi-Sunil

By Sunil Fernandes

Updated: Sunday, October 12, 2014, 9:05 [IST]

Scene 1- You are getting late to reach office when you see your parking lot waterlogged. You manage to wade your way to your car and though you try the car won't start. Reason- water seeped into the engine and damaged it.

Scene 2- You are driving on a highway when your car breaks down. There is no garage within your sight and the next town is 10 kms away. What would you do? Whom would you call for help?

How likely do you think are the chances that anyone owning a car would face either of these situations? Quite likely, isn't it? Do you think that the expenses incurred in the first situation would be met by the insurance claim? The answer, though depressing, is no. insurers do not generally cover damages to the engine in the purview of your auto insurance. But you may face either the first situation or any other situations where the engine gets damaged. What would you do if your cover does not compensate for the expenses incurred which would run into tens of thousands? Depressing, isn't it?

Don't lose heart because here the riders come in handy. Simply put, riders are additional benefits that can be availed to supplement your basic cover at a minimal cost. Car insurers today also provide a host of riders which can be added to the basic cover to increase the benefits available. But does the additional cost incurred to avail the rider benefits justified?

Well, consider the above two scenes for starters. An engine protector rider would take care of the first dilemma. This rider ensures claim payment if the engine is damaged due to any causes. For the second scene, there is a 24X7 Assistance rider under which a simple phone call to the insurer's helpline ensures speedy assistance anytime, anywhere. Doesn't it sound good? There are more riders designed to give you complete protection for your cars. Let's see them one by one.

Depreciation shield rider

When any damage occurs and a claim arises, the insurer pays the claim after assessing the depreciated value of your car parts. Depreciation for metallic parts is considered after 6 months of purchase while plastic parts are valued 50% less from the second day itself. The graph shows the amount of depreciation adjusted with the age of the car. Thus, via depreciation protect rider, you can enjoy the actual claim without the effect of depreciation.

Stop-gap rider

when your car is badly damaged and undergoing repairs, it may take a few months before your car is ready for use. How would you convene during those months? A rental car sounds good right? But you would have to pay for the services, wont you? No, if you opt for a stop-gap rider which provides for expenses incurred when your car is under repairs.

Old for new rider

Iif your car is badly burnt or damaged beyond repair then another rider called old-for-new replaces your old car with a new one of the same make, model and color.

Who bothers to read the fine print when buying a policy? The terms and conditions mentioned therein exclude various grounds of claim payment which the insurer often uses to its benefit. So, with a host of useful riders, your auto insurance promises to be a beneficial experience if you use them as per your requirement. Yes, it would push up the premium a little but the amount of benefits received greatly outweighs the cost factor. Who cares for those few extra charges when their benefits in the long term are hugely beneficial?

Written By: Deepak Yohannan
The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal

For more articles by Deepak Yohannan, please visit MyInsuranceClub.com
You may contact him directly on Twitter: @dyohannan