Home / Money / Personal Finance /  Bengaluru: Affected by the floods? Check how insurance can cover your losses

Natural calamities never ask permission before striking. Its a surprise attack that not only brings certain destruction to individual lives but also havoc on properties. Currently, heavy rains have claimed many lives and damaged properties in Bengaluru. Many regions of the city are flooded with muddy water reaching inside vehicles and apartment complexes. Cars are seen floating on the streets or inside societies of the city. There has been utmost damage to vehicles that came in the way of the flood. In such a situation, the car owners will be facing heavy losses in post-flood. But when there will be relief from the flood, is still keenly watched. However, in this scenario, there is one option that could help car owners -- it is called 'insurance'

If your car is damaged due to the floods, you will have to contact your insurer to claim for the cost to repair the vehicle.

However, not every car insurance can help you claim a percentage of losses on your vehicles due to natural calamities. Thereby, it is important to understand, the features and benefits a car insurance policy holds before availing of it. There are many types of car insurance policies and they vary from company to company.

Car insurers do offer policies that can help owners in repairing the losses caused to their cars due to natural disasters.

Last month, in its blog, Acko stated that flood damage is only covered if you have comprehensive coverage, which is optional and not mandatory like Third-party insurance.

What is a comprehensive car insurance policy?

A comprehensive car insurance policy helps car owners in recovering damages caused by natural calamities like floods, earthquakes, cyclones, etc. Additionally, the policy also covers vehicles from man-made disasters such as accidental damages, fire or explosion, theft, and third-party liabilities.

Acko in its note said that flood damage can cause severe damage and result in the reduction of the car value. It can lead to expensive repairs and, in some cases, even a total loss (damaged beyond repair). While the Comprehensive Car Insurance Policy may cost you more, it could end up saving you a lot of money during such unexpected losses.

In the case of flood damages, although, a comprehensive car insurance policy looks like a perfect coverage option for your vehicle, however, they do not offer coverage for certain damages like to your engine or gearbox.

"To extend the base plan, you can include various add-on covers along with Comprehensive Insurance. Car insurance add-ons are additional covers that provide financial support against specific damages or losses incurred by your vehicle," Team Acko said in their note dated August 26.

The main types of damages to your car from the flood could be as per Acko are --- engine damage, gearbox damage, electric and electronic damage, and upholstery damage.

In the engine damage, water flows into the car engine due to the flood causing havoc to the engine’s internal parts. Meanwhile, under gearbox damage, water flooding in the gearbox can push the unit to malfunction or could be completely unusable.

Under electric and electronic damage, water can cause a short circuit to the electronic or electrical components, or the warning lights on the dashboard could malfunction. Further, in upholstery damage --- due to floods, the interiors like carpet, seats, and other soft furnishings can be impacted.

Add-ons to your comprehensive car insurance policy can be -- engine protection cover, no claim bonus (NCB) protection cover, return to invoice cover, zero depreciation cover, key replacement cover, consumable cover, and roadside assistance cover. Acko explains the following in its blog:

Engine Protection Cover: The car engine is susceptible to damage due to non-usage or due to flood water ingression. Comprehensive Insurance does not cover damages to your car engine; however, you get financial coverage for repairs or replacement of damaged engine parts with this add-on.

No Claim Bonus (NCB) Protection Cover: When you file a claim during the policy period, you lose out on the NCB. However, the NCB Protection Cover keeps the discount intact even if you file a claim. You get to enjoy a discount of up to 50% (if you don’t claim for five consecutive years) even if you raise a claim.

Return to Invoice Cover: If your car is damaged beyond repair caused by flooding or in case it is stolen, with the Return to Invoice Cover, you can claim the purchase price or the car’s invoice value that includes registration cost and road tax as well as per policy terms.

Zero Depreciation Cover: It needs to be noted that over a period of time, car parts depreciate due to wear and tear, and the car value decreases accordingly. When you raise a claim, the insurer pays the depreciated value of the parts and not the entire value. However, with this add-on, the depreciation is not considered while settling the claim, resulting in receiving the total value of car repairs.

Key Replacement Cover: This add-on will cover the cost of replacement or repairs of the lockset that has been impacted due to the floods. Modern car keys are sophisticated and can cost a lot of money in case of repairs or replacement. 

Consumables Cover: With this add-on, a policyholder can protect against expenses incurred on consumables during an accident or natural calamities such as floods. However, notably, the cost of replacing consumable items such as lubricants, gearbox and engine oil, nuts and bolts, grease, etc., are not covered under the base plan.

Roadside Assistance Cover: Under this add-on, you can get 24x7 emergency roadside assistance, including towing services, if your car is stranded due to floods. Also, you can enjoy other benefits such as fuel fill, minor repairs, flat tyre service, etc.

General insurance companies like Acko, HDFC Ergo, ICICI Lombard General Insurance, Tata AIA, Bajaj Allianz General Insurance, Bharti Axa General Insurance, and SBI General Insurance among others do offer car insurance policies.

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