Importance of car insurance in financing car maintenance cost


27 Jul 2023

Understanding the Relationship Between Car Insurance and Car Maintenance Costs

Many people dream of owning a car, and when that dream becomes a reality, it is an amazing feeling. However, owning a car is no easy feat. One is required to be aware of all the fine details related to the car, motor laws, traffic rules, maintenance, repair, car insurance, car insurance renewal, and so much more!

Regular car maintenance and repair are important to ensure that your car runs effectively and remains in the best condition for the longest time. Car maintenance costs can really peak and cost the owner a ton. It is because to ensure that yours is well maintained, you need to take great care of many things, including the condition of the tires, battery condition, coolant, spark plug, engine oil, etc.

Unfortunately, many people think that the financial burden to do all that is on the owner alone, as no motor insurance policy covers any maintenance costs. Third-party insurance also just covers bodily injuries, property damage, and death of third parties due to an accident. Also, you can get damages done by natural and man-made calamities covered under a comprehensive car insurance policy in addition to the third-party cover. But there is no insurance policy that covers regular wear and tear.

However, what a lot of people do not know is that they can get certain exclusions under a comprehensive plan by paying a slightly higher premium. Here are two pointers that you may include in your car insurance policy to help cover your car maintenance cost:

1. Mechanical and electrical breakdowns

The engine is the most crucial & operational part of your car. However, engine protection is not covered under any regular policy. So, in case your engine stops working, you might be left all on your own to get the issue sorted. But to protect your engine, you can get an engine protection cover as an add-on to your car insurance policy.

2. Zero depreciation cover for regular wear & tear

Regular wear and tears are what cost the most, and these are not covered under any motor insurance policy. So, when the time of car insurance renewal arises, and the Insured Declared Value (IDV) is determined, the IDV is adjusted for depreciation as per the norms of the industry. Opting for zero depreciation cover allows you to enjoy more benefits as the cover pays you the right value without considering depreciation.

Now you know how you can use car insurance to your advantage and ensure regular maintenance of your car by paying a slightly higher premium. While some people may argue that instead of paying a higher premium, they will just do the maintenance themselves, it might not be that practical and easy. However, car repairs and maintenance can often cost a huge financial burden at times. To avoid this, one can take advantage of the car insurance policy by getting the add-ons mentioned above.

So, if you do not have those add-ons, you can opt for them at your next car insurance renewal. Until then, do your research, look at different policies and add-ons, and opt for the one that can cover some maintenance costs to ease your financial load.

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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.