Can car insurance give you a new car?

My neighbor Hemant Shah bought a brand-new Jeep Compass on his wife’s birthday as a gift for her in 2017 for approximately Rs. 15 lacs.

This is an incident which is not easy to forget.

Both Hemant & his wife along with another couple friend travelled to Gir in 2019 for a holiday to see the majestic Asiatic Lions.

They were staying overnight in a hotel in Gir.

They woke up to a nasty shock: their much-loved Jeep vehicle was not there in the parking lot. The vehicle was just gone. Stolen by thieves in the middle of the night.

Hemant reported the theft to the nearby police station and the police started their search operations.It was almost 3 months futile search that vehicle was not traced, and police finally closed the case.

Let’s understand 2 perspectives with regards to car insurance:

1. Hemant was renewing his insurance through the dealership where he was getting his vehicle serviced. The executive at the dealership had suggested the cheapest insurance option available. This covered Nil depreciation along with accidental damage to the vehicle. For settlement of insurance claim for theft of the vehicle, the insurance company will pay around Rs. 12 lacs (the IDV- Insured Declared Value) as per standard policy conditions and age of vehicle

2. AND APP Advisor will always suggest taking Return to Invoice Coverage for vehicles up to 3 years old. If Hemant had taken correct advice from a qualified PoSP, he would have got the claim upto the price of a brand-new car from the insurance company, rather than the just the IDV (Insured Declared Value) of the car. This type of add-on coverage is advisable for persons living in localities where theft is rampant, or natural disasters can damage a vehicle beyond repair. Normally this type of add-on cover is available while buying a new vehicle. It is an advisable add-on cover, especially in case of theft or total loss of vehicle in the first 2-3 years.

So YES, Insurance can give you a new car.

Author is Prabhat Vijh- Director & Principal Officer: iAND Insurance Broker Private Limited