5 Benefits of Buying Garage Cash Cover Under Car Insurance

What Is Car Insurance?

Car insurance is a type of motor insurance policy that provides financial assistance in case your four wheeler gets damaged in an accident, natural disaster, fire or manmade calamity. It also pays for your third party liabilities and helps you to recover your losses in case the car gets stolen. Moreover, 4 wheeler insurance also provides compensation in case a car accident leads to the death or disability of the owner-driver.

Every car owner has the freedom to choose whether he wants to buy third party car insurance or comprehensive car insurance. Third party car insurance provides coverage for all third party liabilities of the car owner for causing accidental bodily injuries, death or property damages to third parties. Similarly, comprehensive car insurance provides a blanket cover by providing coverage for third party liabilities along with damages caused to the four wheeler due to natural calamities, accidents, fire, manmade disasters or theft. It also comes with a personal accident cover for the owner-driver of the vehicle.

In India, buying car insurance is not a conscious choice but a legal mandate. According to the Motor Vehicles Act 1988, it is mandatory for all four wheeler vehicles plying on public roads to be covered under a valid third party car insurance policy. The rule has been imposed to ensure that all third party victims get compensation for their bodily injuries or property damages and no car owner goes bankrupt in doing so.

Add-On Covers Under Comprehensive Car Insurance

Comprehensive car insurance is truly comprehensive given the wide range of coverage it offers to a car owner and his vehicle. In addition to the third party car insurance cover and the own damage cover, a comprehensive car insurance policy also comes with a wide range of additional covers for the car owner to choose from. These add-on covers provide additional benefits or protection to the insured four wheeler in exchange for an extra premium.

Some of the most commonly available car insurance add-on covers are engine protector cover, return to invoice, zero depreciation cover, roadside assistance, NCB protection and garage cash cover.

What Is Garage Cash Cover?

Garage Cash cover is an additional benefit that enables a car owner to get a daily allowance from the motor insurance company to cover the daily cost of transportation in case the insured car is at a garage for repairs. Also known as the Downtime Protection or Conveyance Benefit, it enables you to get compensation for the cost of hiring an alternative transport in the absence of your car. With this cover, your insurer will be liable to pay for your daily travel expenses unless your car is repaired and out of the garage.

When a car gets damaged during a mishap, it leads to a loss of inconvenience apart from the damages to the car. The garage cash cover aims to reduce the inconvenience that you face while your damaged car is getting repaired at a garage by covering your daily travel expenses.

For example, imagine a situation where your car gets damaged after a tree falls on it during a storm. As a result, you had to send your car for repair work at a garage. Since you were completely dependent on your car for your daily commute to the office, you are now forced to use public transport/ cab to travel. This is where garage cash cover steps in and your motor insurer reimburses the expenses incurred on travelling daily to and from your workplace.

Things to Keep in Mind When Buying Garage Cash Cover

The garage cash cover comes with its own set of terms and conditions. Take a look at the various terms and conditions that you must keep in mind if you are planning to buy garage cash cover under your car insurance policy:

• Available Under Own Damage Cover - Just like other motor insurance add-ons, the garage cash cover is available under own damage cover only. This means you can buy this add-on only if you have a comprehensive policy and not with third party car insurance.
• Additional Premium - The garage cash cover is an add-on cover and therefore, it needs to be purchased separately by paying an additional price on top of your comprehensive car insurance premium.
• Network Garage Clause - Garage cash cover mostly come with the network garage clause. As part of this clause, your insurer is liable to pay you a conveyance benefit only if your car is being repaired at one of the company’s network garages. In other words, your garage cash claim will be denied if you send your car for repair at a non-network garage of your insurer.
• Limited Number of Claims - Several motor insurance companies allow only a limited number of claims under the downtime protection cover. While some insurers may allow up to two claims in a year, others may allow up to three claims in a single policy year. Thus, you must check with your insurer about the total number of claims admissible under garage cash cover before buying it.
• Minimum Days Clause - A lot of motor insurers provide garage cash cover with minimum days clause. Under this clause, your car needs to stay in the garage for a minimum number of days to be eligible for the conveyance benefit. For example, some policies may seek your car to stay in the garage for at least three days to qualify for garage cash.
• Maximum Coverage Period - The downtime protection cover usually comes with a maximum coverage period. This means your insurer will pay you the garage cash for up to the maximum number of days mentioned in your policy document or until your car gets repaired, whichever is earlier. For example, garage cash can be offered to a maximum of 10 days or 14 days. Make sure to check the maximum coverage period with your insurer before buying this add-on.

5 Benefits of Buying Garage Cash Cover Under Car Insurance

Here are five major benefits of buying garage cash cover under your car insurance policy:

• Takes Care of Travel Expenses

  In case your car is being repaired at a garage, the only option left for you to travel from one place to another is to use public transport or a cab. This will result in incurring additional travel expenses which could have been avoided if only your car was available. But with the garage cash cover, you don’t have to worry about these additional expenses as it will be easily covered under the daily allowance paid by your insurer.

• Value for Money

  Buying the downtime protection cover may appear as an unnecessary expense as you will have to pay a higher premium for it. However, the cost of buying this cover will be easily recovered with the travel allowance paid by your insurer provided your four wheeler is being repaired at a garage.

  For example, suppose you spent Rs 700 to buy the garage cash cover, which provides a conveyance benefit of Rs 500 per day. An accident sends your car to a garage for 10 days and you end up spending Rs 400 every day in the cab to travel to your workplace. This way, you end up spending Rs 4000 on alternate transport in the absence of your car. Since your insurer will pay a total of Rs 5000 for 10 days, you still end up saving Rs 500 after eliminating all the expenses.

  Hence, the garage cash cover provides value for the money spent on buying it.

• Provides Choice of Alternative Vehicle

  In the absence of a garage cash cover, you may have to opt for the most affordable mode of transport, such as metro or bus, to commute if your car is at a garage. But with garage cash cover, you can choose an alternative vehicle of your choice, such as a cab, to travel daily without worrying about the expenses as it will be covered by your motor insurance provider.

• No More Inconvenience

  If your car is being repaired at a garage, you may avoid going out of the house to prevent travel expenses. For example, people may take leave from their office or avoid a trip to the supermarket with their car not around. However, if you have downtime protection cover, you won’t have to hesitate in stepping out of your house for important things as the travel expenses will be covered under the allowance paid by your insurer.

• Prevents Monetary Loss

  The conveyance benefit prevents you from incurring a loss in the absence of your car. With your car at the garage, you will have to spend money to travel every day to your office which will lead to monetary loss. But with the garage cover, the loss will be prevented as the spent money can be reimbursed with your motor insurance company.

In a Nutshell

When your four wheeler is being repaired at a garage, it can result in incurring unwanted expenditure on your daily commute. Garage cash add-on cover allows you to conveniently forget about your daily travel expenses by paying a daily allowance. So if you don’t have another car to come to your rescue, the garage cash cover can be your knight in shining armour in the absence of your car.