Cyclone Michaung Reminds Us Why Car Insurance That Covers Flood Damage Is Important

The recent heavy rainfall that lashed Chennai was attributed to Cyclone Michaung, which has now made landfall in Andhra Pradesh. The damage in the city has been vast, with social media flooded with photos and videos depicting cars being swept away and some areas experiencing water accumulation to the point of complete vehicle submersion.

It is incidents like these that serve as a reminder that our cars should be adequately insured to tackle such damages. But how can that be done?

What All Does Car Insurance Include?

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What all aspects are covered in your car insurance depends on the type of car insurance policy one opts for. Generally, there are two types of car insurance policies you can choose from, and their prices differ based on the scope of the coverage they offer. You can choose to either buy a third-party car insurance or a comprehensive car insurance.

Keep in mind that buying a third-party policy is mandatory under The Motor Vehicles Act. However, since a comprehensive policy offers a wider car insurance coverage it is advised to buy this type of policy to get the best insurance possible. Also, if you wish to enhance the coverage further, you can do so with add-ons for a comprehensive car insurance policy.

Third-party car insurance covers:

Third-party property damage 每 Any type of accidental damage caused to the property owned by a third-party person will be covered.

Cost of treating Injuries 每 The cost of treating injuries caused to the third-party person due to the insured car will be covered.

Death Compensation 每 In case of death of a third-party person, their family will be compensated under this policy.

Legal Liabilities 每 Legal liabilities arising due to an event involving the insured car will be covered under this policy.

A comprehensive car insurance covers:

Complete third-party coverage 每 A comprehensive policy includes all the coverage which a third-party policy offers.

Damages to own car 每 Cost of repairing damages caused to the insured car will be covered under a comprehensive car insurance policy.

Personal Accident Cover 每 Cost of treating injuries caused to the owner-driver will be covered.

Theft 每 The current Insured Declared Value (IDV) of the car will be compensated to the owner of the insured car in the event of theft.

Fire 每 Similar to theft, the car will be treated as ※total loss.§ Under total loss, the owner will be compensated with the current Insured Declared Value (IDV) of the insured car.

Natural calamities 每 If the insured car is hit by a natural calamity like flood, earthquake, landslide, rock-slide, cyclone, hurricane, etc. The owner will be compensated for the amount of damage caused.

Man-made calamities 每 In case the insured car is damaged due to man-made calamities like an act of terrorism, vandalism, riots, etc. The owner will be compensated for the amount of damage caused.

Add-ons 每 With a comprehensive car insurance policy, the owner can extend the scope of car insurance coverage by purchasing add-ons. Add-ons are additional coverage options which are designed to suit specific requirements. There are a number of useful add-ons available across multiple insurance companies. Some of these add-ons are Zero Depreciation, Roadside Assistance, Return to Invoice, NCB protection, Engine Protection Cover and Loss of Personal Belongings.

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Also Read: Automatic vs Manual: How Gear Type Affects Car Insurance Premium

Which Damages Do Floods Cause?

Flood-related damages can encompass engine, gearbox, electric and electronic, and upholstery damage. Repairing or replacing a water-damaged engine alone can cost between Rs 75,000 to Rs 15 lakh.

How Can Comprehensive Car Insurance Help?

Car owners facing unfortunate situations such as cyclone-related damages may find some relief if they possess adequate insurance coverage. Flood protection, however, is not included in the mandatory third-party insurance. Hence, opting for a comprehensive plan is essential to safeguard your vehicle from natural disasters such as floods.

However, it's crucial to note that comprehensive plans do not automatically cover all types of damages. Therefore, when purchasing insurance, carefully review the terms and conditions to ensure flood coverage, such as engine protection cover or hydrostatic cover, is included, as per ET.

According to insurance provider Acko, "The Comprehensive Car Insurance Policy covers damages to your car caused by natural calamities such as floods, earthquakes, cyclones, etc. It also covers damages due to accidents, fire, man-made calamities, and theft." It cautions that flood damage can result in severe damages, depreciating the car's value, leading to expensive repairs, and in extreme cases, total loss (beyond repair). While the Comprehensive Car Insurance Policy may entail a higher cost, it could ultimately save substantial money during unforeseen losses.

For added peace of mind, consider optional add-ons like Return to Invoice Cover, Zero Depreciation Cover, No Claim Bonus, and Engine Protection Cover.

Additionally, it's imperative to avoid driving in waterlogged areas. If your car breaks down in a flooded area, refrain from attempting to restart it, as this may exacerbate the situation.

What Should Policyholders Do In Case Of Damage?

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In the event of damage, policyholders should promptly report a claim to their insurance company. To enhance claim settlements, consider coupling add-ons with zero depreciation and consumable expenses coverage. Roadside assistance packages can provide on-the-spot support, including towing, battery jumpstart, flat tire fixing, rental vehicles, and relaying messages to relatives.

Also Read: Why Buying A Car Is Set To Get Costlier From January 2024

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