Is Engine Protection Add-on Worth it for an Old Car?
No, opting for the engine protection add-on with your car insurance is generally not worth itRead more
Why Engine Protection Cover in Car Insurance May Not Make Sense for Older Cars
A standard comprehensive car insurance policy typically covers accidental damage or loss due to natural calamities. However, it leaves out the internal engine damage. This is where an engine protection cover comes into play. It covers non-accidental damage like the hydrostatic lock (water entering the engine) or lubricant leakage. But this specialised add-on is not worth the extra premium for older vehicles. Here's why:
- Premium-to-Value Disconnect: Every year, your car's Insured Declared Value (IDV) decreases. However, the cost of the engine protect add-on is based on the car's price or a fixed rate. Hence, you end up paying a high premium compared to the car's total value.
- 'Wear & Tear' Exclusion: This add-on never covers mechanical or electrical breakdowns due to routine use, natural ageing or lack of maintenance. So, if your old car's engine fails due to its age, the insurer will reject the claim.
- Risk of Constructive Total Loss: If your old car with a low IDV suffers significant engine damage, the repair cost often exceeds 75% of its IDV. In this case, the insurer declares your car a total loss, and you receive the IDV minus the deductibles, making the engine protection cover worthless.
When Engine Protection Cover Might Still Be Worth it for an Older Car
If your insurance provider does allow you to renew this cover on your older vehicle, it is only worth considering under very specific, high-risk circumstances:
- Flood-Prone Areas: If you live or regularly park in an area with poor drainage that experiences severe, predictable monsoon waterlogging or flash floods, the engine protect add-on is worth considering.
- High-End or Luxury Cars: Renewing car insurance along with the engine protect cover can be worth it for your older car if it is a luxury or an imported model where engine components are extraordinarily expensive or difficult to source.
- No Active Warranty: If your car's warranty has expired, you have to cover all non-accident repair costs from your pocket. If you cannot afford such sudden, costly repairs, having the engine protect cover can provide the essential financial protection.
Is the Engine Protection Add-on Available for a 5-Year-Old Car?
Yes, the engine protection cover is generally available for a 5-year-old car, which is typically the maximum age limit allowed by most motor insurance companies in India. Once a car goes beyond 5 years, insurers stop offering this add-on due to increased risks associated with the wear & tear of the engine. However, some insurers may still offer it for cars older than 5 years, subject to their underwriting rules and other terms & conditions.
Engine Protection Add-On for New vs. Older Cars
Here is how the coverage under engine protection cover in car insurance differs for new and older vehicles:
| Feature |
New Cars (0-5 Years) |
Older Cars (5+ Years) |
| Availability |
Widely available by mostly all insurers |
Restricted or completely unavailable |
| Financial Value |
High; engine replacement can cost a major portion of the car's overall value |
Low; repair costs might exceed the car's total value |
| Risk of Claim Rejection |
Low, if caused by accidents or flash floods |
High, due to preexisting wear & tear |
What Can Void Engine Protection Claim for Your Older Car?
Car insurance companies will strictly reject engine protection claims under the following circumstances:
- Forced Engine Ignition: If you attempt to repeatedly start (crank) a car that is submerged in deep water, insurers treat any resulting cylinder or piston failure as 'consequential damage' and immediately deny the claim.
- Ignoring Warnings: If you continue driving your vehicle even after an oil warning light comes on, and it results in an engine seizure, insurers will see it as neglect and reject your claim.
