A car insurance policy promises to cover many kinds of damages but some damages are never covered by them. These exemptions are permanent and it is a good idea to have a distinct idea about them.
However, there are some exclusion which can be later included in the policy by paying an extra premium and it is a good idea to make use of them, depending upon the circumstances:
- The gradual loss and tear of a car is not covered under a standard plan which is why at the time of the renewal of policy, the Insured Declared Value of the car is revised accordingly, based on the depreciation. The IDV of cars over five years or that of obsolete models is based on the understanding between the insurer and the insured. The IDV of the parts of the car and the related accessories have their own percentages and all of these are calculated during the disbursal of the cover amount. A Zero Depreciation Cover, however, will ensure that the value of damaged parts is not depreciated unless the reimbursement is made and the cover can be extended to the repairing and replacing the cost of fiberglass, rubber and even plastic parts. Paying extra premium for this Zero Depreciation Policy is worth it for old cars.
- In case of own damages, the insurance company will pay the IDV of the car once the deductibles are taken into equation, which is basically the current market value of the car. This is in case of theft or accident, if the cost of retrieval or the repair exceeds 75% of the IDV, then the car is considered a total loss. However, even if one gets the IDV, the settlement amount is often less than what one had paid for the car. So, the amount one gets is far less than what it would cost to buy a car of the same model and make and this is when an Invoice Cover can come in handy. In this case, the exact price of the car is reimbursed according to the original amount mentioned in the invoice.
- The most important aspect of the car, the engine, is not covered in a standard insurance for non- accidental failures and malfunctions and so an engine protector cover will really come in useful. This is recommended for luxury cars or for vehicles with low ground clearance.
- In the same way, one could add a Roadside Assistance cover which will provide basic on- road breakdown situations like battery jump start, a punctured tyre or emergency fuel. These are not covered under regular policy.
- One can also opt for extended accident cover to cover a paid driver or the passengers of the car, which are not covered under a basic personal accident cover, meant only for the owner and driver. If the car is not self-driven, and is mostly driven by a driver then one needs to buy a cover under the Workmen Compensation Act.
Then there are also some deductibles that the insurer needs to keep in mind and a comprehensive list is often provided by the insurance company.