Taking Cover. You can hitch a ride on COCODrive

Have you always relied on your dealer to take care of insurance for your new vehicle? Well, if you’re somewhat tech-savvy, then buying your policies online may save you a tidy sum. COCO by DHFL General Insurance has launched a customisable online comprehensive car insurance policy — COCODrive.

A relatively larger number of add-ons (as many as 19), unbundling of add-ons (allowing customers to pick and choose), and a high personal accident cover are key positives of this product. COCODrive also compares well on premium rates vis-à-vis other products in the market.

The product

COCODrive offers 19 add-ons. While the add-ons offered are not unique, typically, a single product in the market offers a maximum of seven or eight add-ons. COCODrive offers add-ons like zero depreciation, consumable expenses, engine protector, key and lock replacement, tyre replacement, EMI (covers up to three months of EMI) and outstanding loan protector (in case of death or permanent disability), hospi cash (fixed amount for up to five days of hospitalisation after an accident) and emergency hospital and stay, among others.

COCODrive also offers an enhanced personal accident cover that can go up to ₹35 lakh.

Some basics

Motor insurance has two components — a third-party (TP) cover and an own-damage (OD) cover.

A TP covers against damages caused by you to another person/property and is mandatory.

An OD protects your vehicle against damage or theft. While OD is not mandatory, a comprehensive cover — that includes damage of a car, theft, third-party liability and personal accident cover — is advisable.

Hence, while shopping for policies online, start by comparing premiums for a comprehensive coverage.

There have been a few regulatory tweaks that you should be aware of. Since September last year, all new vehicles need to have a long-term TP cover — three years for cars and five years for two-wheelers.

Also, the mandatory personal accident cover has been bumped up to ₹15 lakh; effective January 1, 2019, though, IRDAI unbundled the compulsory personal accident cover and permitted the issuance of a stand-alone policies.

Our take

What’s unique about COCODrive is the large number of add-ons and the flexibility that it offers customers. Most policies bundle up add-ons, bumping up your premium costs. Based on information provided by policybazaar.com , a comprehensive cover (one-year OD plus three-year TP) for a new Maruti Swift VXI (petrol) model, costs at best about ₹14,900 to ₹16,700 of annual premium at an insured declared value (maximum amount an insurer will pay in the event of a total-loss claim) of about ₹5.5 lakh.

COCODrive costs about ₹14,978 for the basic cover without any frills, on a par with the other cheaper online options (the policy or now is only available on the company’s website for purchase).

But a basic policy does not offer the best cover. Hence, it is important to select certain essential add-ons.

Must have add-ons

At the time of claim payout, estimations are made based on the value of your vehicle that factors in depreciation. Hence, a zero-depreciation add-on — that offers comprehensive coverage without factoring in for depreciation — is essential.

The return-to-invoice feature — that gives the complete invoice value above the declared value if the vehicle being damaged beyond repair — is also advisable for a new car.

The cost of consumables like nuts, bolts, screws, engine oil etc. is not covered in a normal comprehensive policy. It is advisable to buy this add-on feature too. An engine protector cover that covers damage due to water ingression or lubricating oil leakage is important if you live in a city prone to floods.

Factoring in these add-ons, the annual premium under COCODrive works out to ₹24,133. A strict comparison is difficult, given that just a few products offer all these add-ons. But, on an average, the premium of other online options works out to ₹22,000-24,000, on a par with that of COCODrive.

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