All You Need To Know About Vehicle Replacement Advantage Add-on In Motor Insurance

When you buy a car insurance policy, it is ideal to select comprehensive coverage. As per the Motor Vehicles Act of 1988, every vehicle plying on Indian roads must be covered with a minimum of third-party liability coverage. While this mandatory coverage helps to meet third-party liabilities, it falls short when it comes to taking care of severe damages to your car. What if your car suffers a total loss? Without the right protection, you may face a serious financial loss if your car is deemed irreparable (in case of severe damages) or untraceable (in case of theft). This is where the Vehicle Replacement Advantage add-on by Bajaj Allianz General Insurance comes to the rescue. The Vehicle Replacement Advantage add-on is an optional rider with car insurance that provides either cash settlement or a new vehicle replacement if the insured car suffers a total loss/ constructive total loss as prescribed in the policy wordings. Let’s learn more about the add-on. * Claims are subject to terms and conditions set forth under motor insurance policy.

What to Know About the Vehicle Replacement Advantage Add-on

The following points briefly describe how the Vehicle Replacement Advantage claim can help the policyholder: If the insured vehicle suffers a total loss as accepted by the policy/rider document, the policyholder can raise a claim under the Vehicle Replacement Advantage add-on. * Additional premium is to be paid by the policyholder to avail this rider to their car insurance policy coverage. The policyholder must renew the overall coverage of the plan, along with the rider, on time, to ensure its validity. In the case of the insured vehicle meets with a total loss/constructive total loss, the insurer, at their discretion, may use two options to settle the claim under the Vehicle Replacement Advantage add-on. The two options are: *

New vehicle

The insurer will replace the insured vehicle with a new equivalent or a near equivalent vehicle of similar make, model, features, specifications, and colour (subject to the availability in the open market). This shall also include the private car package policy for the new vehicle as well as the cost of registration, road tax, and the Octroi payable, as per the new registration location of the new vehicle. * Once the claim has been settled under this cover, the car insurance policy (along with the car insurance add ons) shall be considered as expired and any disbursement for the same from the claim shall be regarded as full and final settlement of the insurer’s liability under the policy. Claims are subject to terms and conditions set forth under motor insurance policy.

Cash settlement

It may happen that a new equivalent or near equivalent vehicle for the damaged/stolen car is not available due to no production of the same, short supply, or due to the insurer’s inability to procure the new vehicle for whatsoever reason. In such an event, the policyholder shall be paid a cash benefit equal to 5% of the IDV (Insured Declared Value) in addition to the actual difference between the original ex-showroom price of the damaged insured vehicle and the IDV. * Here, as well, on the settlement of the claim under this cover, the car insurance policy shall be considered as expired. Claims are subject to terms and conditions set forth under motor insurance policy. Along with knowing the inclusions of car insurance add-ons, it is also important to know their terms and conditions, as well as their exclusions.

Important Conditions and Exclusions for the Vehicle Replacement Advantage Add-on

A brief overview of the Vehicle Replacement Advantage add-on’s conditions are as follows: *

1. Any claim made by the policyholder under this cover will be subject to the terms and conditions prescribed in the car insurance policy.
2. If the insured vehicle has undergone a transfer of ownership, the Vehicle Replacement Advantage coverage shall be considered expired.
3. The insured vehicle will be declared a total loss if the estimates for the aggregate cost of retrieval and/or repair are approved by the insurer’s authorised workshops.

Claims are subject to terms and conditions set forth under motor insurance policy. The insurer will not be liable for the exclusions listed under the car insurance policy in addition to the following exclusions specific to the Vehicle Replacement Advantage add-on: *

1. Where the own damage claim made by the policyholder under the car insurance policy is not payable
2. Where a loss is covered by the car insurance policy, or any policy from another insurer, or if it’s covered under manufacturer’s warranty or recall campaign or any such package at the time
3. Consequential losses arising out of claims made under the Vehicle Replacement Advantage add-on
4. Claims made for accessories unless those are covered under the motor insurance policy via add-ons or endorsements.

Claims are subject to terms and conditions set forth under motor insurance policy. The Vehicle Replacement Advantage add-on can prove to be a beneficial addition to your car insurance plan. It can provide an extra layer of security to your finances and help you have better peace of mind during unfortunate situations. To get an idea of the premium of a comprehensive plan that includes such add-ons, you can use a car insurance calculator.   * Standard T&C apply. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.