Imagine this - you finally buy a car after saving and waiting for a very long time. You make the down payment and take a loan for your car with an EMI option. A few weeks later, however, your car meets with an accident and is damaged severely. You take your car to a garage, where the mechanic estimates that it will take almost 30 days to repair the car. This means that you won’t be able to use the car but you will have to continue making the EMI payments during this period.
Note - The EMI Protector Add-on can be added to policy only if you have taken a loan for your car and the same is mentioned in your policy document and RC copy.
What is an EMI Protector Cover?
EMI Protector Cover is an add-on that you can add to your base motor insurance policy by paying an additional premium to the insurance company. With this add-on, the insurer will cover the Equated Monthly Instalments (EMIs) of your insured car and pay your financier (lender), while it is being fixed at the garage.
Now, while you can’t do anything about the car and must wait for it to be repaired, there is something you can do about the EMI payments. If you opt for the EMI Protector Add-on Cover with your base motor insurance plan, it will help you pay the EMIs when your car is out of action.
What is the EMI Protector Add-on Cover? How does it work? Will it provide coverage under all circumstances? What is the process of adding this add-on cover to your policy? Are there any important conditions you must be aware of?
Let’s find out!
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How does an EMI Protector Cover Work?
If your car is involved in an accident and is damaged to the point where it will take more than 21 to 30 days to repair (as checked and confirmed by the surveyor), the insurer will pay the EMI that you are required to pay to the financial institution or loan provider as specified in the policy.
Please note, the number of days may vary depending on the insurance company.
The actual repair time will begin when the surveyor visits the garage to assess the loss and will end when the vehicle is ready for re-inspection or delivery.
The insurance company will pay the EMIs for the period your car is in the garage for repair. And, they will either pay 1 to 3 months' EMI or the Insured Declared Value mentioned in the policy, whichever is less.
This may differ across insurers. Make sure you go through the policy wordings carefully before opting for this add-on cover.
On 1st January, 2022, Mr. Khan buys a car on loan from a financial institution - and he is required to pay an EMI of Rs. 18,000 for a period of 8 years. He also buys a Car Insurance Plan with the EMI Protector Cover. The Insured Declared Value determined for his car is Rs. 3,00,000.
Let’s say Mr. Khan's car is involved in a major accident on 1st May, 2022. Mr. Khan takes his car to a garage and notifies his insurance company. The insurer sends a surveyor to the garage the next day, on 2nd May, 2022, to assess the damage. The surveyor examines the vehicle and mentions in his report that it will take at least 30 days to repair the car.
So, in Mr. Khan's case, the actual repair time will begin on 2nd May, 2022. And, under the EMI Protector Add-on, the insurance company will pay Mr. Khan’s EMI for the month of May 2022.
What is the Process of Adding an EMI Protector Cover to Your Base Policy?
Here are the steps involved in adding the EMI Protector Cover to your base policy -
- First and foremost, you will have to visit the insurer or insurance broker’s website and provide details related to your car like its make and model, registration number, place of registration, claim details of the previous policy (if any), hypothecation details, and so on.
- After you enter all the required details, you will be directed to the quote page, where you can select the Insured Declared Value and the add-ons you want to buy.
- If you have mentioned your car’s hypothecation details at the beginning, then you will see an option to select the EMI Protector Cover as an add-on.
- When you select the EMI Protector Cover, you will be asked to enter your EMI amount. Here, some insurers may set a capping for the EMI amount - for instance, United India will allow you to enter an amount up to Rs. 50,000 only.
- After all this is done, you will have to make the premium payment. Once the payment is completed, the insurance company will send the policy documents to your registered email address.
What will the EMI Protector Add-On not Cover?
The EMI Protector Add-on will not cover -
If The Claim Is Not Valid Or Admissible Under Section 1 (Own Damage)
If the claim you make is invalid or not admissible under Section 1 (Own Damage) of your motor insurance policy, then your EMI payments will not be covered by the insurance company.
The Car Is Stolen Or Damaged Completely
If your car undergoes a total loss or is stolen, the insurance company will not cover the EMIs under the add-on you purchased.
For instance, Manvi purchases a car on loan. She also buys a Car Insurance Plan with the EMI Protector Add-on. A few months later, her car is stolen. She informs the insurance company about the same and applies for a claim under the EMI Protector Add-on. In this case, the insurance company will not cover Manvi’s EMI amount - as theft is not covered by the EMI Protector Add-on.
The Costs Associated With Loan Payment
The insurance company will not cover the additional costs associated with the loan payment, such as the documentation charges, late payment fees, pre-payment fees, and so on. They will only pay for the EMI.
The insurer will not make any payment in case of a consequential loss, i.e., indirect loss or collateral damage caused to your car.
For example, Mahesh’s car meets with an accident and needs to be towed to the garage. While being towed, the hood of his car gets damaged. Such damage will be considered as consequential damage and will not be covered by the insurance company.
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How to Make a Claim Under The EMI Protector Add-On Cover?
The first step involves informing the insurance company about the damage to your car and raising a claim with them.
Once you notify the insurer, they will appoint a surveyor to assess the damages caused to your car.
After getting the surveyor’s approval, the mechanics at the garage can start repairing the car.
Note - You can make a claim under the EMI Protector Add-on only if the damages caused to the car are such that the repair work on your car will take at least 21to 30 days to complete, This must also be validated by the surveyor.
- When applying for a claim under the EMI Protector Add-on, you will have to submit the following documents -
- Your certified EMI schedule received from your financier
- Your EMI payment track record in the last year
- Other documents such as a duly filled claim form, repair estimate, Aadhar Card, Pan Card, etc.
So, that is all about the EMI Protector Add-on Cover. You can opt for this add-on cover with your base policy if you have taken a loan for your car. In case your car is involved in a major accident and is severely damaged, this add-on will cover the EMI for the period your car is in the garage. The EMI Protector Add-on Cover comes with several terms and conditions - ensure you are aware of them so that you don’t face any hassles later.