Earlier, the only thing that could be customised was apparel. But now the scenario has completely changed. Right from personalising Subway sandwich to getting your thoughts and name printed on coffee mugs and t-shirts, customisation has become the new fad. Even telecom operators like Airtel and Reliance are offering the 'My Plan' option to their customers. In this quest of personalisation, when everything can be tailor-made, why should you leave an insurance behind? If you can customise your cars, then why not your car insurance! Let's know about it in details.

Why should you customise your car insurance policy?

The answer is simple-one size doesn't fit all. We are living in a world where we enjoy full liberty to explore our options. Your car is an extension of your personality. An avid traveller won't stop flaunting about his/her SUV as the perfect companion on harsh road conditions. Similarly, a working professional would be happy with a hatchback that givesa smooth commutingexperience between office and home.

If you buy a car as per your needs, why should you avoid doing the same with your car insurance policy also? A standard car insurance policy may not offer you comprehensive coverage and complete financial protection, and therefore, it makes sense to add riders to your main insurance policy to enjoy all benefits. But before you customise your car insurance policy, it is important to know the correct IDV of your vehicle.

Insured Declared Value or IDV is the market value of your car. It is the maximum amount that the insurer will pay you at the time of claim.A brand new car will fetch the highest IDV, but as the time passes, the rate of depreciation keeps increasing.

Here's a table of depreciation for arriving at a car's IDV

Age of the vehicle    % of depreciation for computing IDV

Up to 6 months  5%
6 months-1 year   15%
1-2 years   20%
2-3 years   30%
3-4 years   40%
4-5 years   50%
Above 5 years   Mutually decided by insurer and policyholder

There is a direct link between the IDV and premium. Higher the IDV, the higher is the premium to be paid. If it is reduced, your premium will also be reduced. However, before you do it, clearly understand its impactwith the help of the following example.

Let's assume your car has an IDV of Rs 5 lakhs and you have the option to either increase the IDV or reduce it by 4%, i.e., increase it to as high as Rs 5.20 lakhs and decrease it to as low as Rs 4.80 lakhs.

• Increasing the IDV: If your car is stolen or there is a total loss, (aggregate cost of retrieval or repair of the vehicle is more than 75% of IDV),the insurer will pay you the IDV of the vehicle. However, it doesn't mean that the insurer will pay you more than Rs 5 lakhs. The insurer will consider the age of the vehicle and depreciation rate before finalising the claim amount.
• Reducing the IDV: Many people lower the IDV of their car to reduce the premium amount. A little saving on the premium by declaring a lower IDV can turn into a bigger loss in case of unfortunate events, like theft, accident, etc. In the above example, if your car is stolen or there is a total loss, you will only get Rs 4.80 lakhs instead of Rs 5 lakhs.

Therefore, it is important to declare the correct IDV in sync with the vehicle age and model.

Ways to customise the policy

After buying your car insurance policy as per the IDV of the vehicle, the next step is to customise it as per your needs. And the best way to do is by adding riders to your policy. Mainly, riders are the add-ons to the primary insurance policy and offers extra benefits over & above the basic insurance policy coverage. However, don't just pick any random rider that you find fancy if it doesn't safeguard your vehicle as it should.

So before you buy riders, here is what you should know about them:

1. Zero depreciation cover: Cars depreciate and it affects the claim settlement process in the realm of the insurance sector. At the time of claim settlement, the insurer will deduct the depreciation value of the car and pay only the remaining amount. It means, even a comprehensive car insurance is not comprehensive at all! Now you might thinking why it is called comprehensive car insurance when it doesn't offer complete coverage? Well, instead of arguing over the terminology, let's concentrate on a zero depreciation rider which offers comprehensive coverage without factoring in depreciation. It means, if your car is damaged following a collision, the insurer will cover the entire claim amount. If you are the owner of a brand new car, it is worthwhile to invest in a zero depreciation cover.
2. No claim bonus protect: No-claim bonus or NCB is a benefit given to motor insurance policyholders for not making a claim in the previous year. It is offered on an own-damage part of the policy, and therefore, if the policyholder has opted only for third-party insurance, he/she would not be liable to earn NCB.
Since NCB is given to policyholders as a reward for making no claim in the previous year, even a single claim can bring the entire NCB to zero. You can prevent the dilemma of having to pick between claims and NCB by adding the NCB protect rider to your main insurance policy. This add-on safeguards your NCB even if a claim is made.
3. Engine protection: With the help of Engine Protection or Machinery Breakdown cover, you can get the coverage even for those engine-related repairs which are not related to accidents. As the cost of repairing in case of any damage to the engine is high, it is worth to buy this rider. This add-on is particularly important for owners of brand new cars, especially for those who are living in Delhi and Mumbai, where the onset of monsoon increases the chances of damage to the engine.
4. Return to Invoice: Buying a Return to Invoice cover will ensure that in the case of total loss or theft, you will get the original invoice price, including registration charges and road tax paid, and not only the IDV of the vehicle. As the number of car theft cases has increased in India, it is advised to go for a Return to Invoice cover which gives enough amount to replace the lost car with a new equivalent vehicle. Keep in mind that the cover will not be available for imported vehicles.
5. Roadside assistance: Be it a flat tyre, mechanical fault or engine issue, anything can hinder your car journey. The situation becomes worse if you are stranded at a place with no help around. In such a situation, roadside assistance comes to your rescue. Under this rider, insurers offer services like towing, refueling, key replacement, etc.; in case of car breakdown.
6. Garage cash cover: The garage cash cover rider compensates you for the cost of hiring an alternative vehicle if your car is stolen or is at garage.
7. Key replacement cover: This rider comes into play if you misplace your keys or they get stolen. In case your vehicle is burgled, the insurer will also compensate you for the cost of replacing the lock and key.
8. Consumable cover: You can approach the insurer to buy this rider if you also want to get the compensation for money spent on nuts, bolts, engine oil in case of an accident.
9. Personal accident cover: It protects your family's future in case of your sudden death or disablement in a car accident. It covers both the owner as well as the driver of the vehicle.
10. Accident coverage for car passengers: This rider gives lump sum compensation to the injured passengers in case of death or partial/permanent disabilities suffered during accidents.
11. Windshield glass cover: In case your car's windshield breaks down, this rider covers/replaces the same without affecting your NCB.
12. Loss of personal belongings: This rider covers the theft or loss of personal belonging items like laptop, etc. from a locked vehicle.
13. Ambulance and medical expenses rider: At the time of accident, if you or the other involved party sustains serious injuries, this rider takes care of ambulance and medical expenses.

The objective of a car insurance policy is to offer complete coverage to you and your vehicle against unforeseen circumstances. By adding riders to your car insurance policy, you can customise the policy as per your needs. So instead of following the crowd, start evaluating what suits you best and amend your car insurance policy accordingly.

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