How to Maximise Motor Insurance Coverage Without Paying Extra

Every year, millions of Indians renew their car or bike insurance in a matter of minutes, often through the dealer or a quick online form. The process feels routine, almost mechanical. However, what most policyholders realise only at the time of a claim is that the way the policy was structured makes all the difference. The same Rs 12,000 premium can either provide full protection or leave painful gaps.

The difference lies in three levers: how you set the Insured Declared Value (IDV), how you use deductibles, and which add-ons you choose to include. Experts point out that optimising these factors does not increase the premium; it simply reallocates what you are already paying.

Getting IDV Right

The IDV, or Insured Declared Value, is the maximum amount the insurer pays if the vehicle is stolen or completely damaged. Lowering the IDV to cut premiums is a common mistake. While it saves a few hundred rupees, it slashes claim payout by thousands. Inflating IDV is equally wasteful, raising cost without improving coverage. The right approach is to match IDV to the vehicle’s fair market value. This ensures claim adequacy without overpaying.

Smart Use of Deductibles

Deductibles determine the portion of loss borne by the owner before insurance applies. A moderate voluntary deductible can lower premiums slightly while keeping claims efficient. But choosing a high deductible may render the policy ineffective for frequent, smaller claims.

“Optimising deductibles is about balance. A reasonable voluntary deductible can trim premiums without hurting claim efficiency, but pushing it too high defeats the purpose of insurance,” says Venkatesh Naidu, CEO of BajajCapital Insurance Broking.

The Power of Add-Ons

Add-ons are where smart structuring truly enhances value. For a marginal additional cost, they cover common exclusions in base policies. Essential add-ons include:

• Zero Depreciation Cover: Pays full replacement cost for parts without depreciation cuts.

• Engine Protect Cover: Covers damage from water ingress or oil leakage, usually excluded in standard policies.

• Return to Invoice Cover: Ensures full invoice value (with taxes and registration) is reimbursed in case of theft or total loss.

• Roadside Assistance: Provides towing, fuel, or minor repair support-useful and inexpensive.

By fine-tuning IDV and deductibles, vehicle owners can often include these add-ons within the same premium outgo.

“Insurance is about value, not volume. Maximising cover without raising premiums is possible if you make informed choices. Every vehicle owner should use insurance as a shield, not just a sticker for compliance,” Naidu explains.

Beyond Dealer Defaults

Dealer-issued policies focus on speed, not optimisation. They may lock customers into higher deductibles or omit key add-ons. Independent brokers and digital platforms allow greater customisation and transparency, enabling policyholders to maximise value.

Checklist for Maximum Coverage 

• Align IDV with the market value of the vehicle.

• Choose moderate voluntary deductibles.

• Add Zero Depreciation, Engine Protect, and Return to Invoice covers.

• Compare beyond dealer policies for flexibility.

• Review annually as the vehicle ages.

Motor insurance is not just regulatory compliance; it is a shield against financial loss. With careful structuring, the same premium can stretch to provide comprehensive coverage, protect against exclusions, and prevent financial shocks at claim time.