All you need to know about daily allowance car insurance add on


02 Jun 2023

Understanding the Benefits, Coverage, and Exclusions of Daily Allowance Add-On in Car Insurance Policies

A daily allowance is an add on to your car policy that can provide you with comfort and peace of mind in the event of a breakdown. With this cover, you're eligible to receive a daily allowance in the event of a breakdown or accident, which can help cover the costs of alternative transport or accommodation while your vehicle is being repaired. This type of cover is particularly useful for people who rely on their car for work, as it can help to maintain your income even when your car is off the road.

In this article, we'll explain what daily allowance is, how it works, and how much it usually covers. We'll also look at some of the exclusions that come with this car insurance add on cover.

What is a daily allowance car policy add on?

To comprehend what this car insurance add on provides, first grasp what the term "daily" means. It refers to the period during which something is not usable.

Now, to put everything simply, a daily allowance can be defined as money paid for the period that something is not in use. This might be due to any technical or mechanical problem. A daily allowance add on in automobile insurance provides a certain amount of cash while your vehicle is being repaired.

Why daily allowance is important?

If you have a daily allowance add on, you won't have to remain at home or incur travel expenses out of pocket if your car breaks down. You can keep travelling by choosing a comfortable method of transportation.

Most working people should not be forced to take time off or accept an inconvenient form of commuting simply because they are unable to use their car, especially when the vehicle is insured. The insured can travel to the areas they like without having to stay at home for an extended amount of time.

This is among the most important aspects of this daily allowance rider. When your automobile is being serviced, your insurance company will pay the expense of transportation.

When is daily allowance not offered?

Based on the benefits mentioned above, there is no doubt that a daily allowance is indeed good. However, to ensure you are properly covered, it is important to understand the add on exclusions of a daily allowance in a car policy.

  1. If your insurance claim is refused, you will not get the daily allowance money.

  2. If just the windscreen or glass components of the vehicle have been damaged, the insurance will not consider a claim against the daily allowed.

  3. You cannot make a claim on the daily allowance add on if the total days required to fix the vehicle is less than the minimum days specified in the policy conditions.


In short, daily allowance is a useful add on to a car policy that can make your travels more relaxing and convenient if your vehicle breaks down. The extent of the coverage will depend on which insurer you choose and what your individual needs are, but given the potential value of these policies, it's important to do some research about daily allowance add on in car insurance online before deciding which one is right for you.

Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.