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Car insurance provides protection against a defined set of risks. However, certain expenses may fall outside the scope of the base policy. Add-on covers allow you to extend your protection for specific situations, such as depreciation on replaced parts, certain types of engine damage, or the financial impact of a total loss. These covers are optional and can be purchased for an additional premium.
However, not every add-on will be useful for every car owner. Zero depreciation, engine protection, and Return to Invoice (RTI), for instance, cover very different situations. Understanding these differences can help you decide which ones are worth the additional premium for your car.
What are Add-ons in Car Insurance?
A car insurance policy covers specific risks. However, there may be situations where you want a little more protection than the standard policy provides. Add-ons allow you customise your coverage for such needs. They are optional covers that you can purchase with an own damage or comprehensive car insurance policy for an additional premium.
Each add-on has a specific purpose. For instance, zero depreciation cover reduces the depreciation deducted on replaced parts during a claim. Engine protection covers certain types of engine damage that may otherwise fall outside standard coverage, while Return to Invoice (RTI) provides additional financial protection if your car is stolen or declared a total loss.
You do not necessarily need every add-on available. The idea is to choose the ones that make sense for:
- Your car
- Its age
- Where and how you drive
- The expenses you would prefer not to bear entirely yourself
What is Zero Depreciation Cover?
Cars and their parts lose value as they age. This reduction in value is known as depreciation. If an accident leaves your car needing new parts, the insurer may account for depreciation while settling the claim. As a result, you may have to pay part of the replacement cost yourself.
An zero depreciation car insurance add-on reduces this deduction by covering depreciation on eligible parts.
Example: Your car is involved in an accident and the bumper needs to be replaced. Under a regular own damage claim, depreciation may be deducted from the value of the replaced part. With zero depreciation cover, that deduction may be covered as per the policy terms, reducing what you need to pay towards the repair.
When can zero depreciation cover be useful?
For a new or relatively new car, zero depreciation cover can help keep your share of repair costs lower by covering the depreciation that would otherwise be deducted on certain replaced parts. It can reduce the amount you pay from your own pocket when parts need to be replaced after an accident.
For example, if a bumper needs replacing, depreciation might normally be deducted from the cost of the part. With zero depreciation cover, this deduction can be covered, depending on the policy terms.
Note: Zero depreciation does not make every repair cost-free. Deductibles, exclusions and other policy conditions can still affect how much you need to pay during a claim.
What is Engine Protection Cover?
Engine repairs can be expensive, especially when internal components are damaged. A standard own damage policy may not cover certain types of engine damage, such as those resulting from water ingression or leakage of lubricating oil. This is where an engine protection cover can be useful.
An engine protect in car insurance add-on provides coverage for specified types of engines and related damage. Depending on the policy, this may include:
- Damage caused by lubricating oil leakage after an accident that damages the car’s undercarriage.
- Engine damage caused by water entering the engine while driving through a flooded area.
- Engine damage caused by water entering the engine while the car is parked in a flooded area.
- Accidental damage to engine components, such as the gearbox, pistons, connecting rods and other internal parts.
Example: If water enters the engine while a car is being driven through a waterlogged road, it could affect internal engine components. An engine protection cover can help with the repair costs arising from such situations.
Who should consider engine protection?
Your driving conditions matter here. If you live or regularly drive in an area prone to flooding or heavy waterlogging, having an engine protection cover is important. It can also be useful for a newer or higher-value car where major engine repairs could be expensive.
Before adding it, however, read the conditions carefully. Engine protection does not cover all mechanical or engine problem, and exclusions still apply.
What is Return to Invoice Cover?
Return to Invoice works quite differently from the other two add-ons.
Under a standard motor policy, the amount payable in the case of theft or total loss is generally linked to the car’s Insured Declared Value (IDV). As a car gets older, its IDV generally reduces due to depreciation.
An RTI car insurance add-on can bridge the gap between the amount payable under the standard policy and the vehicle’s invoice-related value, as specified in the policy.
Example: A relatively new car is stolen and cannot be recovered. Now,
Without RTI cover: The claim amount is generally based on the car’s IDV, depending on the policy terms.
With RTI cover: The payout can be based on the invoice-related value specified under the add-on. This helps reduce the gap created by depreciation.
When does RTI make sense?
RTI is most useful in situations where the car is stolen or damaged beyond repair. It is not meant for smaller repairs such as dents, scratches or other repairable accident damage.
For a new car, RTI can be worth considering because its invoice value may be higher than its IDV. The cover can help reduce this difference if the car is stolen or declared a total loss.
Note: Insurers may restrict RTI to vehicles below a particular age. Hence, eligibility should be checked before purchasing or renewing the policy.
Zero Depreciation vs Engine Protect vs Return to Invoice
All three add-ons provide additional protection. However, they are meant for very different situations.
| Add-on | What is it mainly for? | When does it help? |
| Zero Depreciation | Depreciation deducted on eligible replaced parts | Your car needs covered repairs after an accident |
| Engine Protect | Specified engine and related damage not otherwise covered | The engine suffers covered damage, such as from water ingression |
| Return to Invoice | Difference between the applicable claim amount and invoice-related value, as defined by the policy | Your car is stolen or declared a total loss |
At a Glance:
- Zero depreciation is largely about repair costs.
- Engine protection is about specific engine-related risks.
- RTI is primarily about major losses such as theft or total loss.
How Do Add-ons Affect Your Car Insurance Premium?
Every add-on comes at an additional premium. So, adding zero depreciation, engine protection and RTI will make your policy more expensive than buying the base cover alone.
There is no single amount by which an add-on will increase the premium. The cost can depend on factors such as:
- Your vehicle’s make and model
- Your vehicle’s age
- IDV
- Your vehicle’s registration location
- Chosen coverage
- The insurer’s pricing
This is why the policy with the cheapest premium is not automatically the best choice, nor is the policy with the most add-ons. A better approach is to compare the extra premium with the financial risk the add-on is designed to cover.
Example: Paying extra for engine protection may make more sense to someone who regularly encounters waterlogged roads than to someone whose car is rarely exposed to that risk.
What Should You Check When You Renew Car Insurance?
Renewal is a good time to review your add-ons rather than automatically continuing with the same ones. Your car is a year older, its IDV may have changed and an add-on that made sense when the car was new may not be as suitable now.
When you renew car insurance, ensure you check:
- Your existing add-ons: See which add-ons you currently have and whether you still need them.
- Vehicle-age limits: Some add-ons may only be available for cars up to a certain age, depending on the insurer.
- What each add-on covers: Review the coverage, exclusions, limits and conditions, particularly if the policy terms have changed.
- The additional premium: Look at how much each add-on adds to your renewal premium and whether the protection still justifies the cost.
- Any new requirements: Changes in how or where you use your car may make a different add-on more relevant. For example, regular driving through areas prone to waterlogging may make engine protection worth considering.
Final Thoughts
Zero depreciation, engine protection and RTI solve three different problems. Zero depreciation can reduce depreciation-related deductions on eligible repairs. Engine protection covers specified engine-related risks, while RTI becomes relevant primarily if a car is stolen or suffers a total loss.
For a new car, one or more of these covers may be useful. But an add-on is worth paying for only when its protection matches a risk that matters to you. Before purchasing or renewing your policy, compare the additional premium with the coverage offered and read the applicable conditions carefully. That way, you are not simply adding more to your policy. You know exactly what you are paying extra to protect.