Daily Allowance Cover

Daily allowance cover or downtime allowance add on is a type of car insurance optional that offers coverage for the cost of commuting while the insured's car is under repair. This is usually claimed if the repair takes more than two days. This lets the insured continue with their daily travels while their car gets repaired.

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What is Daily Allowance Cover in Car Insurance?

As the name suggests, this add-on provides a daily allowance of a fixed sum to help the insured cover their everyday transportation expenses while their insured vehicle is under repair. This sum can vary with different insurance providers in India and is usually Rs. 500 per day for up to two weeks. This benefit can be availed in case of an emergency or accident that affects the insured’s vehicle. Let’s take an example:

Vini had a 15 kilometres commute to work every day. One day, she got into a bad accident and her car ended up in a garage for days. Luckily, Vini had a comprehensive car insurance plan along with a downtime allowance add-on so she got in touch with her insurer. Her insurance company informed her that her car would take around 8 days in the garage. Meanwhile, she could avail of Rs. 500 daily allowance to continue with her daily travel. This way, by only paying a nominal premium of Rs. 400 she could continue going to work in a comfortable conveyance without costing her anything else.

In such cases, this add-on will offer continued connectivity as well as reduce the financial burden of the insured.

Benefits of Daily Allowance Cover

Travelling daily via cabs and taxis can be really expensive in India, especially during peak office hours. Thus, if an insured’s car needs more than two days to get repaired at an authorized garage then they can avail of this benefit. Like most add-ons in car insurance, the daily allowance optional cover has several benefits:

• Convenience: In spite of not having their car for days, the insured can continue travelling in comfort thanks to the daily allowance set to cover their commute.
• Saves Money: At a very nominal price the insured can save a lot of money in case of emergencies such as these. Without spending exorbitantly on other means of commute, they can use the allowance to continue travelling.
• Travel Options: Those who use their own vehicles to commute frequently certainly find it difficult to use public commute. Or they may be living in an area lacking reliable public transports. Whatever the reason, this add-on gives the insured freedom to choose the means of transport in case their car breaks down. All they need to do is to contact their insurer to raise a claim.

Not just these, this cover also covers several natural and man-made catastrophic events that may result in the vehicle’s breakdown. In such a situation too an allowance will be provided as per the policy schedule.

Downtime Insurance: What is Covered and Not Covered?

This add-on will cover the cost of daily transportation in several events leading to the unavailability of the insured’s car while it’s in an authorized garage for repair.

What is Covered

• The daily allowance cover will offer a fixed sum for everyday commute for the specified number of days
• In case of repairs, several insurers offer an allowance for up to 10-15 days depending on their policy
• In case of total loss or theft of the vehicle, different insurers may pay for 15-20 days during the period of insurance

What Is Not Covered

In certain situations, the insurer will not be entertained:

• If a claim is rejected, then the daily allowance will not be paid
• No claim for allowance can be made if the damage to the windshield or glass parts of the car  
• No claim will be entertained if the car is not repaired at an authorized garage
• Some insurance companies require a specific minimum number of days for the repair required; for example, if the repair time of a damaged car takes less than three days then the policyholder can't file a claim

Since this add-on is offered by several car insurance policies, its exact list of inclusions and exclusions may vary. It is strongly recommended to compare different policies and go through the policy terms carefully.