For most car owners, the focus shifts from extensive coverage to the practical and cost-conscious options. Having clarity about which insurance policy components are necessary to keep and which to avoid becomes crucial to maximise the coverage possibilities.

On this basis, this guide explains how to review car insurance for vehicles aged more than five years, what coverage to retain and what to avoid.

How Does Car Insurance Need Change for Vehicles Older Than Five Years?

Once a vehicle completes its five years on the road from the first purchase, its market value and insurance policy are significantly changed. Insurance companies determine the IDV of these vehicles by applying standard depreciation rates, which often go about and above 50% for such vehicles older than five years.

Since the IDV represents the maximum claim amount in case of total loss or theft, the insurance premium also changes accordingly. Here are some of the common changes policyholders may experience if the car exceeds half a decade of usage:

• Lower IDV due to depreciation
• Reduced premium compared to new cars
• Higher likelihood of minor repairs or part replacements
• Changes the cost-benefit balance of certain add-ons

Essential Coverage to Keep for Older Cars

While the car has become older, there are still a few add-ons that are worth keeping. The following are a few add-ons that give you appropriate coverage for your vehicle:

1. Third-Party Liability Insurance

Third-party car insurance is mandatory by law. As per the Motor Vehicle Act 1988, each vehicle on Indian public roads should have third-party insurance. This coverage provides financial protection for third-party bodily and property damage from your car. However, the insurance policy does cover your car.

2. Comprehensive Car Insurance

The comprehensive car insurance is the upgraded version of the third-party motor insurance. It provides both third-party and own car damage protection from accidents. For your own vehicle, this coverage may protect the following scenarios as well:

• Road accidents
• Natural calamities such as floods, storms, or landslides
• Fire or explosion
• Theft

Add-Ons That Can Be Valuable

There are multiple add-ons that are valuable for cars older than five years of age. The following list of add-ons includes the top options that are often paired with these vehicles' motor insurance:

Roadside Assistance Cover

The roadside assistance cover can be highly useful for older vehicles since they are more prone to wear and tear as compared to newer variants. This add-on gives you support for prompt mechanical assistance if your vehicle's system suddenly malfunctions while travelling. Some of the common services included with the roadside assistance include:

• Towing assistance to the nearest garage
• Battery jump-start support
• Flat tyre replacement assistance
• Emergency fuel delivery

For roadside assistance cover, prefer insurers with an extensive network of cashless garages, as it increases the scope of covered locations. For example, insurers like HDFC ERGO's car insurance give access to more than 12,200 cashless garages.

Engine Protection Cover

The engine protection add-on can be relevant for vehicle owners who live in waterlogging-prone areas. In most standard motor insurance policies, the engine damage cover is not included with the base coverage. In order to get engine repairs from unforeseen circumstances, engine protection cover helps you get complete coverage for its connected parts.

Consumables Cover

The Consumable cover includes the cost of small components that are typically excluded from the standard policies. Some of the common consumable items include:

• Engine oil
• Brake oil
• Lubricants
• Nuts and bolts

Add-Ons That Can Be Skipped

There are certain add-ons that may not reach the full potential of their intended offerings. As a car's value decreases over time, the following coverage may become less relevant:

Zero Depreciation Cover

The zero depreciation cover allows the policyholder to claim the full cost of replaced parts without conserving depreciation. However, since the car is five years old, the insurer may restrict the addition of this add-on to insurance policies.

Return to Invoice Cover

The return to invoice cover reimburses the original invoice value of the vehicle if it is stolen or declared a total loss. Since older vehicles have already experienced substantial depreciation, this add-on may only be available for newer models.

Key Replacement Cover

This add-on pays for the cost of lost or damaged car keys. You can avoid this add-on since the cost to replace older car keys is not excessively high.

Final Thoughts

Vehicles older than five years often get a few restrictions from insurers. But you can still get covered for the vehicle by having a comprehensive car insurance that also includes mandatory third-party cover. Along with that, you can also opt for useful add-ons like road assistance cover, engine protection cover and consumable cover. This combination of motor insurance can give your car complete protection from uncertain situations.

Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.