Team AckoOct 7, 2021
Most people often tend to buy a car insurance policy as a compliance requirement. They simply follow the advice given by a car dealer while purchasing and then hire an agent to help them renew the policy. But when an unfortunate incident related to the car occurs, they become unhappy with the agent if the claim amount is low. Thanks to technology, nowadays many insurance companies take efforts to explain their products in a simple language so that the layman can make an informed choice about the purchase. One such concept related to car insurance is additional coverages like Downtime Allowance, Zero Depreciation, Engine Protection, etc.
Many car-owners look at Add-ons as frills and avoid spending even a small amount of money for buying them. Understanding car insurance and the financial protection it provides does not require you to be an expert in the field. For example, understanding the Downtime Allowance Add-on is very easy. Read on to know more:
To understand what the Add-on offers, first let’s understand the meaning of the word “downtime”. It means something that is not available for use. Simply put, downtime allowance would mean money for the time a specific thing is not in use. This could mostly be due to a technical or mechanical issue. The Downtime Allowance Add-on in car insurance offers a specific amount of money when your car is under repairs.
Consider Ms Jane owns a sedan car.
She has bought the Downtime Allowance cover along with her Comprehensive Car Insurance policy for around Rs. 500 additional premium.
She drives to work on a daily basis. Her place of work is about 15 kilometres from her house.
An alternate mode of transport requires around Rs. 400 every day to and from her place of work.
Her car met with an accident where Ms Jane suffered minor injuries but the car was severely damaged.
She got in touch with the insurance company and sent the car for repairs.
Now an important question here is – How will Ms Jane travel to work every day without her car? She will have to spend Rs. 400 every day for commuting to work. Since the damage to the car was major, it will take more than 7 to 8 days for the car to get repaired. She needs to spend Rs. 2,800 to 3,200 for travelling to work when her car is under repairs.
This is where the Downtime Allowance Add-on will come into the picture. With this Add-on, Ms Jane will not have to spend money on travelling to work till the time her car gets repaired. Here car insurance companies will bear this cost as per the terms and conditions of the policy.
In the above example, note that the cost of travelling to work for 7 to 8 days, is much more than the cost of buying the Downtime Allowance Add-on.
A claim against the Downtime Allowance Add-on or Downtime Protection in car insurance can be claimed when your car is immobilized due to accidental damage, natural or man-made calamity like a tsunami, flood, bandh, riot or strike that causes major damage to property, earthquake, the imposition of curfew by a government authority, etc.
Here are the steps for making a claim against Downtime Protection of your car insurance policy:
Get in touch with the insurance company as soon as possible and inform them about the incident that caused the damage. The claim process can be different in case of different insurance companies. A customer relationship manager of your insurer will guide you to raise a claim as per the procedure.
Arrange the documents as conveyed by the insurer. Usually, a policyholder needs the following documents while raising a claim:
A duly filled claim form
A written application for claim
Copy of the First Information Report (FIR) if required
Copy of the Car Insurance Policy
Copy of your Driving License
Any other documents as conveyed by the insurance company
The Downtime Allowance Add on is additional coverage that you can buy only with a Comprehensive Car Insurance policy. This Add-on cannot be bought with the basic Third-party (TP) insurance policy because of the simple reason that the policyholder’s car is not insured in a TP plan. It is possible to buy the Downtime Allowance Add-on in the following two ways:
Weigh all your options while buying a car insurance policy. You should be clear about the type of coverages you need before buying a car insurance policy and its Add-ons. Look for a good car insurance company and check if they offer the Downtime Allowance Claim Add-on. Then visit the insurer’s website and begin with the purchase journey. You will be asked to divulge a few details related to you, your car, and claims. You will also get an option to select Add-ons. Make payment after selecting the required coverage and you are likely to receive the policy instantly at your email address.
To purchase the Downtime Allowance Add-on offline, you need to either get in touch directly with the insurance company or with an agent. Convey your requirements to the concerned person and they will suggest car insurance coverage suitable to your needs. Select the coverage, review your policy, and make payment. You will receive the car insurance policy via post or courier in a few days time.
Buying a suitable, additional coverage with a car insurance policy is always beneficial. You can make use of various benefits that accompany the purchase of an Add-on. The Downtime allowance will give you the following benefits if you purchase it with your comprehensive car insurance policy:
The policyholder does not have to stay home or pay traveling expenses from their pocket because of a car breakdown. He/she can continue to travel by opting for a convenient mode. Those who are working professionals, do not have to take leave from office or opt for an inconvenient mode of transport just because they cannot use their car. Others can continue to visit the places they want to without staying home for long stretches of time.
This is one of the main features of the Downtime Allowance Add-on. Your insurance company will bear the cost of travelling while your car is undergoing repairs. You can use this money for break-free travelling.
One does not have to select unwanted travelling options because of a car breakdown. The policyholder can get in touch with the insurance company and decide the mode of travel they wish to use as per the terms of the policy.
The Downtime Allowance Add-on is available for a commercial car insurance policy. This Add-on can be claimed when a Passenger Carrying Vehicle faces a breakdown due to accidental damage, natural or man-made calamity like a tsunami, flood, bandh, riot or strike that causes major damage to property, earthquake, the imposition of curfew by a government authority, etc.
Following are the special conditions of the Downtime Allowance Add-on:
Downtime allowance will be paid to the policyholder from the date the insurance company was intimated about the claim in writing or when the car was submitted to a network garage for repairs. The allowance will be paid up to the date when repairs get completed or until the specified number of days (as per the terms of the policy) is over.
Note: A network garage is a vehicle repair workshop that is affiliated to the insurance company.
In case the vehicle has suffered major damage i.e. Total Loss or gets stolen, the insurance company will pay a lump sum amount of Downtime Allowance for the period of 10 days under the Add-on.
Claims made in a situation of the natural or man-made catastrophic event the allowance will be paid either from the date of written notice or when the government issues a public advisory for the occurred event.
These are situations where you cannot raise a claim against your car insurance policy. Here are the exclusions of the Downtime Allowance Add-on:
The downtime allowance cannot be paid to the policyholder if a claim is rejected.
The insurer will not honour a claim made against Downtime Allowance if damage has occurred to only the windshield or glass parts of the car.
The policyholder cannot file a claim against downtime allowance if the number of days required to repair the car are less than the number of minimum days specified in the terms of the policy.
Also, read: Return To Invoice Cover (RTI) in Car Insurance
It is important to understand that any claim raised by the policyholder may not get settled. But if you take necessary precautions, you can increase the chances of claim approval. Here are the things that you need to keep in mind while raising a claim against your car insurance policy.
Apart from accident claims, the intimation should be sent to the insurance company as soon as possible. Failing to do so can result in claim rejection. To avoid this, get in touch with the insurance company and ask the customer relationship executive about the intimation process. Follow the process diligently.
Every claim is scrutinised by a special team called the Claims teams. They investigate every detail that you have shared and try to procure other evidence for the purpose of claim settlement. If the insurance company finds out that the facts you stated are false or that the claim is not genuine, then the claim will be rejected. Repeated cases can also land you in prison.
The insurance company will communicate a list of documents required for the purpose of claim settlement. You need to arrange each document and submit it to the insurance company. For example, the copy of the First Information Report (FIR) is required in case of a theft claim. Your claim will be rejected if you fail to submit this document.
How can I buy the Downtime Allowance Add-on for my commercial car?
The downtime allowance Add-on can be bought for both private and commercial cars. You can speak to your insurance company or an agent to check if they provide this Add-on for a commercial vehicle. If available, you can add the Downtime Allowance coverage to your Comprehensive car insurance policy while buying or renewing it.
Is it possible to buy the Downtime Allowance cover in the middle of the policy period?
Yes, some insurance companies allow the policyholder to get their policies endorsed with the required Add-on in the middle of the policy period. Get in touch with your insurance company to initiate the process of endorsement.
A tree fell on my car 5 days back but I forgot to send a written notice to the insurance company. Can I still claim for downtime allowance?
No, you need to intimate the insurance company about a claimable incident as soon as possible. Leverage is given only in case of accident claims. However, you still need to inform the insurance company about the incident for records and possible claim settlement.
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