Are add-on covers important for your car insurance?

Nutan Gupta

16 Dec 2016

Car is among one of the most prized possessions for an individual. Naturally, while buying a new car, one makes sure to buy all the necessary add-ons in order to protect his car from any major injury. Here are some of the riders one can purchase while buying a car.

Rider Benefit
Zero Depreciation A zero depreciation cover does not factor in the depreciation and provides for the complete coverage of the vehicle. You will however have to pay the minimum deductible which is a fixed fee of Rs. 1000 for vehicles less than 1500 cc. The minimum deductible is higher if the vehicle is more than 1500cc.
NCB Protection A NCB Protection cover is an add-on feature which will protect your no-claim bonus even if you have made a claim during the year.
Engine Protection As the name refers, this cover is to protect your engine and electronic circuit cover especially during monsoons and at the time of flooding. Opting for this cover will help you save on major cost repairs
Roadside Assistance Stuck in a remote location with a flat tyre? This cover will help you get roadside assistance no matter where you are stuck. There are times when you run out of fuel at an unknown location or face battery related issues, opting for this cover will give you all these benefits.
Daily Cash Allowance If your vehicle stays in the garage for more than 3-4 days, the owner’s transportation costs are taken care of if he has opted for this cover.

Now, the question arises, how many of these car insurance covers are important?

An add-on cover should not be bought only for the sake of buying it. Also, one should not spend unnecessarily by buying add-ons which are not required.

- A zero depreciation cover should be bought while you purchase a new vehicle.

- A roadside assistance cover should be bought if you drive a lot to far away places.

- The engine of any vehicle is usually the most expensive part of the vehicle. Even a small damage to the engine can prove to be very costly. So, it is very important for an individual to buy an engine protection cover. It can help you save a lot of money in case of damage in your vehicle’s engine.

Since add-on covers come at an additional cost, choose a cover wisely!

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mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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Are add-on covers important for your car insurance?

Nutan Gupta

16 Dec 2016

Car is among one of the most prized possessions for an individual. Naturally, while buying a new car, one makes sure to buy all the necessary add-ons in order to protect his car from any major injury. Here are some of the riders one can purchase while buying a car.

Rider Benefit
Zero Depreciation A zero depreciation cover does not factor in the depreciation and provides for the complete coverage of the vehicle. You will however have to pay the minimum deductible which is a fixed fee of Rs. 1000 for vehicles less than 1500 cc. The minimum deductible is higher if the vehicle is more than 1500cc.
NCB Protection A NCB Protection cover is an add-on feature which will protect your no-claim bonus even if you have made a claim during the year.
Engine Protection As the name refers, this cover is to protect your engine and electronic circuit cover especially during monsoons and at the time of flooding. Opting for this cover will help you save on major cost repairs
Roadside Assistance Stuck in a remote location with a flat tyre? This cover will help you get roadside assistance no matter where you are stuck. There are times when you run out of fuel at an unknown location or face battery related issues, opting for this cover will give you all these benefits.
Daily Cash Allowance If your vehicle stays in the garage for more than 3-4 days, the owner’s transportation costs are taken care of if he has opted for this cover.

Now, the question arises, how many of these car insurance covers are important?

An add-on cover should not be bought only for the sake of buying it. Also, one should not spend unnecessarily by buying add-ons which are not required.

- A zero depreciation cover should be bought while you purchase a new vehicle.

- A roadside assistance cover should be bought if you drive a lot to far away places.

- The engine of any vehicle is usually the most expensive part of the vehicle. Even a small damage to the engine can prove to be very costly. So, it is very important for an individual to buy an engine protection cover. It can help you save a lot of money in case of damage in your vehicle’s engine.

Since add-on covers come at an additional cost, choose a cover wisely!