Meera owns one car and drives it to work every day. When a collision put it in the garage for a week, the cab fares to and from the office came to more than the repair excess she paid.
A daily allowance car insurance add-on pays you a fixed sum for each day your car is off the road being repaired after an insured event. Some insurers call it downtime allowance, daily conveyance benefit, daily cash allowance or garage cash. The daily allowance in car insurance means the same thing under any of those names.
What is daily allowance in car insurance?
The daily allowance in car insurance means, a fixed daily payout, made for a capped number of days, while your insured car is in a network garage after a covered claim.
It pays cash toward your travel. It does not supply a replacement vehicle, though at Zurich Kotak the cover can be extended to include rental car expenses.
Two terms carry the whole cover: the waiting period and the number of payable days. Both are set by your policy rather than by a market rule, so Zurich Kotak's own figures are set out here.
Table: Daily car allowance terms at Zurich Kotak
Term | What applies |
|---|---|
Waiting period | The allowance is not payable if the repair takes up to 3 days |
Maximum days, repair claim | 10 days during the period of insurance |
Maximum days, theft or total loss claim | 15 days during the period of insurance |
Where repairs must be carried out | A network garage |
Base policy required | Comprehensive or standalone own damage cover |
Optional extension | Can be extended to cover rental car expenses |
Across the Indian market, the daily amount is commonly around Rs. 500, though it varies by insurer and by policy. Check the figure printed on your own policy schedule rather than assuming a market norm.
One point that catches people out. If the repair finishes early, you are paid for the days the car spent in the garage rather than the full capped period. The cap is a ceiling, not an entitlement.
The waiting period bites at the other end. Meera's car was in the garage for a week, which clears it comfortably. The same damage repaired in three days would have paid her nothing at all.
What daily allowance cover does not include
The allowance is tied to a successful own damage claim , so anything outside that claim falls outside the cover.
Routine servicing and maintenance. Downtime for a scheduled service is not an insured event, so no allowance is payable. This is the most common misunderstanding about the cover.
Repairs at a non-network garage. The benefit applies to repairs carried out at an authorised network garage.
Repairs completed within the waiting period. A repair taking three days or less pays nothing at Zurich Kotak.
Windshield and glass-part damage. Claims limited to glass are excluded from the allowance.
Anything following a rejected claim. If the underlying car insurance claim is turned down, the allowance is not paid either.
The add-on has no independent existence. It pays only when the base claim pays.
Benefits of daily allowance in car insurance
The benefits of daily allowance in car insurance come down to three things and the useful one is predictability rather than saving money outright.
Cash flow during downtime. Repairs arrive unplanned and so do the travel costs that follow. The allowance turns an unpredictable expense into a known daily figure.
Freedom to choose how you travel. The payout is cash, so you decide between a cab, a rental or public transport. Nothing obliges you to spend it a particular way.
A known ceiling before you need it. You can work out the maximum car insurance daily allowance benefit available to you before a claim ever happens, which is more than can be said for most repair costs.
To see whether the car insurance daily allowance benefit earns its premium, run the arithmetic.
Take an eight-day repair at a typical Rs. 500 a day, against an add-on premium in the region of Rs. 400.
The payout is Rs. 4,000 if every day counts once the waiting period is cleared or Rs. 2,500 if the first three days are excluded from the count.
That difference is worth confirming with your insurer, because the policy wording sets a threshold for eligibility without stating which of the two bases applies.
Who should choose a daily allowance add-on with car insurance?
The cover suits people for whom a car off the road creates a daily cost rather than an inconvenience.
Single-car households. With no second vehicle to fall back on, every repair day becomes a paid journey.
Daily commuters. If the car does a fixed office run, the cost of replacing it is easy to predict and easy to underestimate.
Owners on routes with limited public transport. Where the commute is poorly served by buses or trains, the practical alternative is a cab at full fare.
Business users. Sales, field and client-facing roles lose working time as well as money when the car is unavailable.
The cover is less compelling if you have a second car in the household, a short commute you can walk or cycle or a workplace that does not require you to be there daily.
How can daily allowance in car insurance be purchased?
The add-on can be bought when you take out the policy or at renewal and it cannot be attached midway through a policy year.
Add it to a comprehensive or standalone own damage policy for an extra premium on top of the base cover. If you skip it at purchase, the next opportunity is your renewal date.
Use a premium calculator to see the difference the add-on makes before committing. On most private car policies the amount is small relative to the base premium, which is why it is worth deciding on its merits rather than on cost alone.
How to claim your daily allowance
Report the claim first and let the daily allowance follow it, because the allowance is settled as part of the underlying own damage claim rather than separately.
Call 1800-2120 between 8 a.m. and 8 p.m. and intimate the claim with your policy details.
Note the claim reference number issued once the claim is registered.
Have the repair carried out at a network garage. An inspection is arranged within 24 hours on a working day or the next working day for Sundays and public holidays.
Submit the documents required under the policy. These commonly include the claim form, policy copy, registration certificate, identity and address proof, the driving licence and an FIR copy for theft or third-party claims.
Confirm the repair duration with the garage, since the payable days are counted from it once the waiting period is cleared.
On timing, most insurers require the claim to be intimated within about three days of the damage. Report it the same day where you can.
Things to keep in mind
Two conditions govern this add-on more than any others: the base policy it attaches to and the number of times you can use it.
The daily allowance car insurance add-on can only be bought alongside own damage cover, whether standalone or inside a comprehensive policy.
It cannot be added to a third-party policy. A third-party policy does not cover your own vehicle, so it generates no repair for the allowance to attach to.
Insurers also cap how many times the benefit can be used in a policy year. Across the market the figure is commonly two or three. Check the limit on your own schedule.
Finally, the allowance counts from the day after the vehicle reaches the garage, not from the date of the accident. A car that is at the roadside for two days before being towed does not earn an allowance for those days.
Conclusion
Daily allowance cover is a small add-on that solves one specific problem: the cost of getting around while your car is being repaired. It works best for people without a fallback vehicle and worst for anyone who could manage a fortnight without driving.
Before buying it, check three figures on the policy schedule. The waiting period, the daily amount and the maximum number of days. Those three decide the whole value of the cover.
For Meera, with one car and a daily commute, the arithmetic works. For a two-car household it may not.
Compare the add-on premium against what a week of alternative travel would cost you. Zurich Kotak's daily car allowance cover can be added to comprehensive or standalone own damage car insurance.
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Frequently asked questions
Can I add daily allowance cover to a third-party car insurance policy?
No. The add-on requires comprehensive or standalone own damage cover, because it attaches to a repair claim on your own vehicle.
How many days does daily allowance cover pay for?
At Zurich Kotak, the allowance is payable for a maximum of 10 days during the period of insurance, extending to 15 days for a theft or total loss claim.
How much is the daily allowance per day?
The amount is set in your policy schedule. Around Rs. 500 a day is common across the Indian market, though it varies between insurers and policies.
How long must my car be under repair before the allowance starts?
The Zurich Kotak add-on is not payable where the repair takes up to three days. Longer repairs qualify, counted from the day after the car reaches the garage.
Is routine servicing or maintenance covered?
No. The allowance follows an insured claim, so downtime for a scheduled service or general maintenance does not qualify.
Can I claim daily allowance if my car was damaged in a flood or riot?
Yes, where the base policy covers that peril and the repair clears the waiting period. Flood and riot damage are covered perils under a comprehensive policy.
How many daily allowance claims can I make in a policy year?
Insurers cap this, commonly at two or three claims. Confirm the limit printed on your own policy schedule.
Can I add this cover in the middle of my policy period?
Generally no. Add-ons are selected when the policy is issued or at renewal.
What documents do I need to claim daily allowance?
The claim form, policy copy, registration certificate, identity and address proof, driving licence and an FIR copy where theft or a third party is involved.
How soon must I report a claim?
Most insurers expect intimation within roughly three days of the damage. Reporting on the day of the incident avoids any question over the delay.
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