What is Daily Allowance Cover in Car Insurance?
As the name suggests, the downtime allowance add-on in car insurance provides a daily allowance of a fixed sum to help the insured cover their everyday transportation expenses while their insured vehicle is under repair. This sum can vary with different insurance providers in India and is usually Rs. 500 per day for up to two weeks. This benefit can be availed in case of an emergency or accident that affects the insured's vehicle. Let's take an example:
Vini had a 15 kilometres commute to work every day. One day, she got into a bad accident and her car ended up in a garage for days. Luckily, Vini had a comprehensive car insurance plan along with a downtime allowance add-on so she got in touch with her insurer. Her insurance company informed her that her car would take around 8 days in the garage. Meanwhile, she could avail of Rs. 500 daily allowance to continue with her daily travel. This way, by only paying a nominal premium of Rs. 400 she could continue going to work in a comfortable conveyance without costing her anything else.
In such cases, the daily allowance add-on cover will offer continued connectivity as well as reduce the financial burden of the insured.
Benefits of Daily Allowance Cover in Car Insurance
Travelling daily via cabs and taxis can be really expensive in India, especially during peak office hours. Thus, if an insured's car needs more than two days to get repaired at an authorized garage then they can avail of this benefit. Like most add-ons in car insurance, the daily allowance cover has several benefits:
- Convenience: In spite of not having their car for days, the insured can continue travelling in comfort thanks to the daily allowance in car insurance set to cover their commute.
- Saves Money: At a very nominal price the insured can save a lot of money in case of emergencies such as these. Without spending exorbitantly on other means of commute, they can use the allowance to continue travelling.
- Travel Options: Those who use their own vehicles to commute frequently certainly find it difficult to use public commute. Or they may be living in an area lacking reliable public transports. Whatever the reason, the inconvenience cover in car insurance gives the insured freedom to choose the means of transport in case their car breaks down. All they need to do is to contact their insurer to raise a claim.
Not just these, this cover also covers several natural and man-made catastrophic events that may result in the vehicle's breakdown. In such a situation too an allowance will be provided as per the policy schedule.
Downtime Insurance: What is Covered and Not Covered?
The daily allowance in car insurance covers the cost of daily transportation in several events leading to the unavailability of the insured's car while it's in an authorized garage for repair.
What is Covered
- The daily allowance cover will offer a fixed sum for everyday commute for the specified number of days
- In case of repairs, several insurers offer an allowance for up to 10-15 days depending on their policy
- In case of total loss or theft of the vehicle, different insurers may pay for 15-20 days during the period of insurance
What Is Not Covered
- If your car insurance claim is rejected, then the daily allowance will not be paid
- No claim for daily allowance cover can be made if the damage to the windshield or glass parts of the car
- No claim will be entertained if the car is not repaired at an authorized network garage.
- Some insurance companies require a specific minimum number of days for the repair required; for example, if the repair time of a damaged car takes less than three days the policyholder can't file a claim
Since the daily add-on is offered by several car insurance policies, its exact list of inclusions and exclusions may vary. It is strongly recommended to compare different policies and go through the policy terms carefully.
Things to Keep in Mind While Purchasing Daily Allowance Cover in Car Insurance
Here are some points that you must keep in mind when opting for the daily allowance add on with your car insurance policy:
- The daily allowance add on cover in car insurance is available only with own damage or comprehensive plans. You cannot purchase this add-on with third party car insurance.
- Opting for the daily allowance cover with your basic plan will increase the overall premium of your car insurance and make it slightly more expensive than the base standard policy.
- Check the allowance amount and the number of claims allowed by the insurer under the daily allowance cover in car insurance. Mostly, insurers allow 2-3 claims under this add-on. You should ensure that the allowance amount meets your requirements and covers the potential expenses you may incur.
- Carefully review the policy exclusions to understand the situations in which the daily allowance cover will not not offer coverage. Exclusions may vary between policies, so make sure you are aware of any conditions that may affect your coverage.
- Go through the claim process for reimbursement under the daily allowance cover in your car insurance policy. Understand the documentation requirements and the claim filing procedure.
- Compare car insurance quotes and premium costs on Policybazaar.com to find a plan that offers the right coverage at an affordable price. Consider any deductibles or additional fees that may apply.
