In India, the monsoon season means constant waterlogging and severe traffic jams. The risk of accidents increases due to lower visibility and reduced road traction during the rainy season. The fact is, owning and operating a vehicle carries a degree of risk, especially at this time of year. This is why the government mandates at least third-party insurance. But what should you look for when choosing motor insurance? What add-ons should you consider? According to a report by PolicyBazaar, most buyers prioritise affordability and brand reputation.
Motor insurance: Key factors
Let’s take a look at what people usually prefer in motor insurance:
1. Affordability
29 per cent of buyers consider affordability as their top priority
2. Brand reputation
21 per cent of buyers prioritise the brand’s reputation
3. Customer service
19 per cent value excellent customer service
4. Coverage features
16 per cent look for comprehensive coverage features
5. Claim process and settlement
15 per cent focus on a smooth and efficient claim process
Preferred add-ons
During the monsoon season, add-ons like roadside assistance become crucial. High demand for add-ons such as Roadside Assistance, Engine Protector, and Return to Invoice rises during this season.
Popular add-ons:
1. Roadside assistance60 per cent prefer this cover
2. Zero depreciation55 per cent opt for this add-on
3. Engine protector20 per cent seek this coverage, particularly beneficial during monsoon seasons.
4. Consumables cover20 per cent choose this add-on for covering the cost of consumables.
5. Key lock replacement18 per cent value this coverage for added security.
6. Invoice price cover10 per cent prefer this to ensure full reimbursement in case of total loss.
7. Tyre protection coverSouth (26 per cent) has double the uptake of Tyre Protection cover compared to the India average (13 per cent).
Seasonal coverage for monsoon
Monsoon unleashes a wave of vehicle damage. Floods and waterlogging can transform roads into rivers, especially in metro cities like Mumbai, Delhi, and Bangalore, leading to water inundation. This can severely damage car engines. Heavy rains can also uproot trees and poles, causing dents and other exterior damage to vehicles.
Must-have add-ons for monsoon:
1. Roadside assistance50 per cent seek this coverage to handle emergencies.
2. Engine protector30 per cent prefer this to protect against water damage.
3. Return to invoice price cover20 per cent opt for this to ensure full value reimbursement.
Pay As You Drive (PAYD) plans
Pay As You Drive (PAYD) implies “usage-based” car insurance. It allows the insured person to pay for insurance based on the distance driven rather than a flat fee. This means that those who drive their cars rarely will pay less premium with PAYD car insurance policies. There is no pre-condition or pressure of maximum kilometres to be driven. With PAYD car insurance, you can also avail renewal discounts on premium for not making any claims during the policy year.
More than 1 in 3 buyers opt for PAYD plans, while 3 in 4 renew them, indicating a shift towards personalised motor insurance coverage.
5,000 km: Chosen by 30 per cent of buyers
7,500 km: Chosen by 25 per cent of buyers
10,000 km: Chosen by 25 per cent of buyers
2,500 km: Chosen by 20 per cent of buyers
Additionally, 20 per cent of these buyers opt for top-ups, showing flexibility in their usage needs.
The interest towards PAYD plans is highest in the South (55 per cent) and lowest in the North (36 per cent).
Top cities using PAYD plans: Delhi (8 per cent), Bangalore (5 per cent), Mumbai (3 per cent, Pune (2 per cent), Gurgaon (2 per cent)
The adoption of PAYD plans is highest in the metros as they collectively account for a significant percentage of insured vehicles.
Tier-wise distribution of motor insurance buyers
Metros: 40 per cent
Tier-2: 36 per cent
Tier-3: 24 per cent
There has been an increase of 13 per cent in online adoption by res per centdents of tier-2 and tier-3 cities, driven by growing insurance awareness and the advancement of digital technology.
Recommended add-ons
Covers engine damage due to water ingress, a common issue during monsoons. However, driving through floods or switching on the engine after submersion could be considered negligence, leading to claim rejection.
Ensures you receive the full invoice value of your car in case of total loss due to severe damage, such as complete submersion or falling of trees.
Provides 24/7 assistance for car troubles like flat tyres or dead batteries, including towing, jumpstarting, or on-site repairs.
Eliminates out-of-pocket expenses for repairs and replacements during the claim period by covering the full cost of replaced parts.
Covers consumable items like engine oil, lubricants, and coolants used during repairs, minimising your out-of-pocket expenses after a claim.
Factors to consider when buying add-ons
1. Location
If you live in coastal or flood-prone regions, comprehensive protection against monsoon-related damages is essential.
2. Vehicle usage
Consider how frequently and in what manner you use your vehicle during the monsoon season.
3. Value and age of your vehicle
Older vehicles may require different coverage types compared to newer ones.
4. Specific risks
Assess risks such as waterlogging, engine damage from water, and the likelihood of accidents due to slippery roads.
5. Expense of add-ons
Ensure the cost of add-ons aligns with your budget while offering sufficient coverage.
6. Timing
Remember that add-ons cannot be added midway through the policy and can only be added during policy renewal.
First Published: Jul 16 2024 | 3:14 PM IST