r/TheInsuranceGuy

A lot of people go with dealer insurance because of the “easy/hassle-free claims” thing. That’s what the salesmen say anyway, right?

But one thing people often miss is that the surveyor is appointed by the insurer, and they’re the ones who assess the damage and decide what gets approved.

So if you buy ICICI insurance directly from ICICI vs buying the same ICICI policy through a dealer, the claim experience shouldn’t suddenly be different just because you bought it from the dealer.

And yes, the ASC/dealer is still there to help with the claim process and handling regardless of where you bought the policy from.

So what should you actually look at when buying insurance with a new car?

Two things mainly:

1. The price the dealer is offering.

2. What exactly is included in the quote - which insurer, IDV, and which add-ons.

Don’t just compare the final premium. Ask for the actual quote and check what you’re paying for.

And to be safe, check the insurer’s own cashless garage list as well. That way you know whether the ASC/dealer you’ll be using is actually cashless with that particular insurer.

Dealer insurance isn't always bad. Just don’t assume it’s automatically better because the salesman says “claims are hassle-free.”

Add-ons are where most of the confusion happens. The insurer lists multiple options, the aggregator lets you click checkboxes, and you have no idea which ones actually matter.

 

Here's my honest ranking based on what I've seen across hundreds of policies and claims:

 

Must-have (get these):

 

1. Zero Depreciation — Covers the full cost of replaced parts without depreciation deduction. Without this, a ₹1 lakh claim might only pay ₹60,000-70,000 because of depreciation on parts. Worth it for cars up to 5-10 years old.

2. Engine Protection— Critical during monsoons. If water enters the engine (hydrostatic lock), standard insurance won't cover it. Engine repairs can easily be ₹1-3 lakhs. This add-on costs ₹500-1500 per year.

Note: whether you have this add-on or not, your engine will be covered if your car has gotten into accident nevertheless

 

3. Consumables Cover — Nuts, bolts, engine oil, coolant, AC gas — these things get replaced during repairs but aren't covered by default. Small cost, saves ₹1,000-8,000 during a claim. But quite small add-on which makes it worth taking.

4. Return to Invoice (RTI)— If your car is a total loss (stolen or completely wrecked), without RTI you get the IDV which depreciates every year. With RTI, you get the original invoice value. Worth it for newer cars (1-3 years).

Note: this add-on is subjective, some might see value in it while others won’t, worth keeping for vehicles that have loans and high risk or theft or total loss.

 

Optional (depends on your situation):

 

5. Tyre Cover— If you drive a lot on highways or bad roads, could help

Note: usually covers four tyre replacements a year and again this is like engine cover, if your tyre is blown without accident then this cover helps otherwise tyres are covered under accidental damaged(damages that include vehicle body damages or scratches alongside tyre damage)

 

6. Key Replacement — Modern car keys cost ₹10,000-30,000 to replace. If you're prone to losing things, consider it.

Note: small add-on but sometimes comes bundled so nice to have.

 

Usually skip or could be considered for packaged deals:

 

7. Daily Allowance — Pays ₹500-1000/day while your car is being repaired. Sounds nice, rarely worth the premium.

Note: comes with limits on how many days are allowed and total compensation per day but definitely worth for the price charged for this.

 

8. Geographical Extension — Only needed if you're driving to Nepal/Bhutan/Sri Lanka or any other country.

 

The first four together typically add large amount to your annual premium. For the coverage they provide during a real claim, that's nothing.

IDV stands for Insured Declared Value. In simple terms, it's the current market value of your car according to the insurance company.

 

Why does this matter? Because if your car is stolen or completely totalled in an accident, the IDV is the maximum amount the insurer will pay you. Not what you paid for the car. Not what you think it's worth. The IDV.

 

Here's how it's calculated:

 

Your car's ex-showroom price minus depreciation based on age.

 

Depreciation slabs:

- Less than 6 months: 5%

- 6 months to 1 year: 15%

- 1 to 2 years: 20%

- 2 to 3 years: 30%

- 3 to 4 years: 40%

- 4 to 5 years: 50%

 

So if your car's ex-showroom was ₹10,00,000 and it's 3 years old, the IDV is roughly ₹7,00,000 (after 30% depreciation). That's the max you'd get in a total loss scenario.

 

What most people don't realize:

- A higher IDV means a slightly higher premium. But it also means a higher payout.

- A lower IDV saves you ₹500-1000 on premium but could cost you lakhs during a  total loss claim.

- Some aggregators default to the lowest IDV to show you the cheapest quote. That's how they make their plans look cheaper.

 

My suggestion: keep the IDV as close to the actual market value as possible. The ₹500 you save today isn't worth ₹1-2 lakhs less during a claim. Consider it as the value you might want if your car would be taken away from you right now or within the next year.

 

If you have questions about what IDV your car should have, feel free to ask here.