Daily allowance in car insurance: Meaning, benefits and other aspects

Resorting to other forms of transportation are quite challenging for people who are in the habit of commuting by car. They encounter a lot of problems if they leave their car in the network shop for servicing or repairs. Traveling in India for 10–15 days by cab or taxi can get exceedingly expensive during business hours since these cab service companies frequently demand astronomically high prices during peak hours.

Hence, it is advisable for you to get a daily allowance add-on in your car insurance policy to travel without financial restrictions in such circumstances.

What does daily allowance in car insurance mean?

In the event that the car is in the shop for more than two days, the policyholders are entitled to a daily allowance. In India, the amount of cash allowances normally granted with this add-on is Rs. 500 daily for up to 14 days. The amount of compensation and the number of days might differ between insurance providers.

This benefit is only available if the car is repaired at a network garage. This add-on is typically used by those who are excessively reliant on a single car and live in areas where public transportation is unavailable.

Benefits of daily allowance in car insurance

For policyholders, purchasing appropriate, additional add-ons in car insurance policy is usually advantageous. Consumers can choose from a range of advantages that come with the purchase of an add-on. If policyholders buy the daily allowance add-on together with comprehensive car insurance, it offers the following advantages:

• Easy commuting

• Helps in financial savings

• Covers for travel costs

• Provide a selection of different vehicles

• Freedom of choice.

Who should choose a daily allowance add-on with car insurance?

• Working professionals who rely solely on one car should get this add-on since it is crucial to them and will be advantageous if their vehicle is in the garage. They should purchase the daily allowance add-on so that they won't have to worry about undesirable travel choices like taking public transportation.

• Public transportation systems are often in decent condition in other nations, but in India, it is frequently unclean and unsafe, which discourages many people from using buses and other forms of public transportation. Those who don't like using the bus or train should choose this add-on.

How can daily allowance in car insurance be purchased?

Standalone own-damage and comprehensive car insurance plan both provide an option to add a daily allowance add-on. In order to have complete coverage, car owners are often advised to get a comprehensive car insurance policy. The option to purchase a daily allowance claim add-on is available to the policyholder at the time of purchase, and if they choose not to do so at that time, they can choose to do so when their policy is renewed.

Things to keep in mind while buying daily allowance in car insurance

• The daily allowance add-on cover may only be obtained in conjunction with own-damage insurance, which implies that no third-party insurance policies may be added to a comprehensive car insurance policy.

• In addition to the premium you pay for the comprehensive car insurance plan, you must pay an additional premium amount to get the daily allowance car insurance add-on cover.

• The policyholder's ability to file claims under the daily allowance add-on cover is often limited by the car insurance companies.

To extend the scope of your car insurance policy, you can purchase a number of add-ons, like zero depreciation or daily allowance.

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