Motor Insurance Add-Ons You're Paying For - But May Not Need

More cover doesn’t always mean better protection. When Noida-based Srikant Yadav bought a five-year-old car, he was keen to “do insurance right.” So, when his agent recommended a bundle of add-ons - zero depreciation, engine protection, return-to-invoice, NCB  (No Claim Bonus) protection, and roadside assistance - it sounded like a prudent choice. The final quote, however, told a different story: his annual premium had jumped from Rs 8,500 to nearly Rs 21,000.

Two years later, he hadn’t made a single claim. Worse, when he finally needed engine-related coverage after driving through flooded roads, he learnt that some add-ons he’d paid for no longer applied to his car’s age. What he thought was maximum protection turned out to be mismatched protection.

That experience is far more common than most car owners realise.

Why Add-Ons Often Go Wrong

Motor insurance add-ons aren’t bad products but they’re often bought without context. Many are added automatically, renewed blindly, or selected out of fear rather than relevance. Venkatesh Naidu, CEO, BajajCapital Insurance Broking Ltd, explains, “Add-ons are meant to address specific risks. Problems arise when consumers buy everything without matching coverage to the car’s age, usage, and exposure.”

What is the result? We pay thousands every year for cover that may never be claimed or cannot be claimed.

What Makes Sense for New Cars (0–3 Years)

For new cars, some add-ons genuinely add value.

• Zero depreciation usually works well since depreciation deductions are waived.

• Engine protection is useful if you drive through flood-prone areas.

• Return to Invoice (RTI) may make sense for high-value or financed cars, though it applies only in rare cases like total loss or theft.

Even here, fine print matters. Many zero-dep covers limit the number of claims allowed per year, making it essential to understand usage caps before assuming full protection.

Mid-Age Cars (3–5 Years): Time to Recalculate

This is where over-insurance often creeps in. Zero depreciation may still be available, but the cost-benefit equation should be reassessed as the car’s value drops.

NCB Protector becomes relevant once you’ve built a meaningful no-claim bonus. Engine protection depends more on driving conditions than vehicle age.

Older Cars (5+ Years): Keep It Lean

For older vehicles, most add-ons stop making financial sense. Zero depreciation is often unavailable, RTI rarely justifies its cost, and only engine protection may be worth considering - if flooding is a genuine risk.

Naidu notes, “For older vehicles, insurance should focus on efficiency, not excess. Overpaying doesn’t improve protection.”

Add-Ons Many People Can Skip

Roadside assistance (often already provided elsewhere), key replacement cover, daily allowance, and consumables cover rarely justify their premiums for most budget and mid-range cars. These add-ons sound practical but deliver limited value relative to how infrequently they are actually used.

The Bottom Line

Smart motor insurance isn’t about buying every add-on - it’s about buying the right ones. Before renewing, ask: Is this add-on relevant to my car today? What exactly triggers a claim? Is the premium proportionate to the risk it covers? Sometimes, better insurance doesn’t mean more cover, just clearer choices, fewer assumptions, and protection that actually works when you need it.

In a market where premiums are rising and vehicle ownership costs keep climbing, such small, informed decisions can quietly free up thousands each year—money better used to build emergency buffers or fund genuine priorities rather than pay for unused protection.