Car insurance helps you to pay the cost of repairs, damages, accidents and thefts. But what about the trouble caused while your car is being repaired after making a claim? Would your car policy pay for the daily conveyance costs?
In such cases, you can opt for a daily allowance add-on and customise your comprehensive car insurance policy. Under the add-on, you get a fixed allowance per day for covering the travelling and other incidental expenses. While your car is under repair, this add-on can alleviate your troubles.
The add-on, however, comes at an added premium cost. The key question is: does the daily allowance benefit justify its cost? Let’s understand how a daily allowance works, the benefits of daily allowance in car insurance vis-à-vis its costs. Then you can decide whether it’s truly worth adding to your car insurance policy.
What is a Daily Allowance Add-on in Car Insurance?
The Daily Allowance Cover (also known as Downtime Allowance or Daily Cash Allowance, or Conveyance Benefit) is an optional extra cover available with a comprehensive car insurance policy. The add-on provides a daily cash benefit while the car is being repaired at a network garage for more than two consecutive days due to an accident or any other covered damage.
Daily allowance is paid by the insurance company to help the insured cover the cost of alternative commuting — such as taking a cab, hiring a taxi, or renting another vehicle — while their car is under repair and is unavailable.
How Daily Allowance work?
You can add the daily allowance cover when purchasing or renewing a comprehensive car insurance policy by paying an additional premium. In the event of a claim for damages or repairs in a covered incident, the insurer will provide a fixed daily allowance for the specified number of days on the basis of how many days your car is kept in the workshop for repairs.
For example, say your daily allowance covers are ₹500 per day for up to 10 days. After damage, your car stays in the network workshop for a period of 8 days. After two days, you will start getting a daily allowance of ₹500 to cover the commute or transport costs.
Cost of Adding Daily Allowance to the Policy
The cost of daily allowance depends on the type of vehicle, model, insurer and the amount of daily allowance you choose. The premiums for daily allowance are generally affordable.
1. The amount of daily allowance can range from ₹300 to ₹1,000 per day.
2. It has a coverage period of around 10-15 days per claim.
3. The premiums may range from ₹300 to ₹1,500.
For those who depend on their car for daily travel, a daily allowance might increase the car insurance premium slightly, but the benefits can outweigh its cost for the convenience it provides.
Benefits of Adding a Daily Allowance to the Policy
Daily allowance add-on offers several benefits to the insured by paying the fixed expenses to meet the inconvenience of being without the vehicle. Here are some of the key benefits of daily allowance in car insurance:
1. Transportation support: The allowance pays a fixed amount as a reimbursement for the cab charges or commute expenses while the car is being repaired.
2. Decreases inconvenience: It helps you to continue your daily routine without worrying about the added transport cost.
3. Fixed pay-out: It pays a predetermined fixed amount irrespective of actual cost.
4. No end use: The daily allowance is paid in cash and can be used for any purpose without any end-use restrictions.
5. Budget saving: It helps in saving you from the surprise/unexpected expenses due to car damage. It prevents sudden expenses and hampering your budget allocations.
Limits and Conditions of Adding Daily Allowance to the Policy
Here are some of the limits and conditions of daily allowances to know before opting for this add:
1. Daily allowance add is applicable only for accidental repairs. It is payable only when the car is in a network workshop for repairs due to an accident claim.
2. The daily allowance cover has a limited repair time cap of 10–15 days per claim or 30 days per year.
3. Most insurers have a deductible waiting period of 1–3 days before the benefit starts.
4. The cover is valid only for repairs at an insured-approved or network workshop. It’s not applicable to reimbursement for car insurance claims.
5. If you buy only the third-party coverage, the add-on would not be available.
Read more – Here’s a complete guide to add-on covers in car insurance
Conclusion
For car owners, insurance is not only about fixing/repairing the car; it is also about all round protection and making incidents less of a hassle, both financially and mentally. The daily allowance add-on is a smart way to meet this requirement in the modern world. It offers cash assistance and options during the period when your car is not in use, to ensure you are protected not only from the unexpected repair costs but also from the incidental costs that may arise from such repairs. This small add-on could make a big difference the next time your car isn't working if you depend on it a lot for your everyday needs. With Generali Central’s range of add-ons, you can add the daily allowance cover to your car insurance plan for wider protection.
