Car damaged in floods/rain: What kind of insurance should you opt for?

Many parts of northern India are facing heavy rainfall leading to waterlogging, landslides and road cave-ins. Several areas, including plush localities in cities, are partially submerged in water, causing damage to properties, cars and two-wheelers. The extent of damage will be known once the water recedes. For car owners, whose vehicles are damaged by floods, repair costs can be an expensive affair. However, with proper insurance coverage, one can recover a significant portion of that cost.

How can floods damage cars?

Flood-damaged cars can have serious problems such as engine failure, damage to electrical and electronic systems, rust and odour. Excessive exposure to water can also lead to malfunction of the gearbox. When water enters a parked vehicle, it could also damage a car’s interior. Some of these problems are apparent immediately but a few can crop up over some time.

Do all car insurance policies cover flood-related damages?

“A comprehensive policy covers all types of accidents due to fire, flood and theft,” says T A Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance.

A comprehensive car insurance policy provides cover for all damages due to floods, subject to depreciation based on the age of the car. For all plastic and rubber parts, a 50 per cent depreciation is applicable, which means only half of the total repair cost will be reimbursed and the policyholder would have to bear the balance amount. However, a standalone comprehensive car insurance policy may not protect against all the damages caused by floods.

Can an insurance company deny claims related to flood damage?

Though a basic comprehensive car insurance policy provides coverage for all flood-related damages, insurance companies can refuse to reimburse if there is damage to the car due to the driver’s intentional action.

“If your car is parked in a basement and it gets drowned, and you report directly to the insurance company and tow it to a service centre or garage then there is no problem. But if you try to start your car after it was drowned, then your engine will go into hydrostatic lock. In that scenario, the insurance company will not cover the engine failure because it is consequential damage due to an intentional action,” says Nitin Kumar, Business Head – Motor Insurance, Policybazaar.com.

A hydrostatic lock occurs when the car engine comes in contact with water. The engine gets damaged when water enters into a running engine. In case the engine is not running and water ingresses, then there may be no damage, but it is advisable to get professional assistance before starting the engine.

What types of car insurance coverage should one opt for?

With changing weather patterns, unplanned development and inadequate drainage systems, many cities are unprepared for extremely heavy rainfall and resultant floods.

While buying a car insurance cover, one should keep in mind these rising instances of heavy downpours. Along with a standard comprehensive car insurance plan, one should go for add-on covers such as zero depreciation and engine protection cover.

“We advise all our customers that they should not start their engines when stuck in a waterlogged area. The moment you start your engine and water gets in, it gets blocked and damaged,” Bajaj Allianz General Insurance’s Ramalingam says.

In a standalone car insurance plan, damage to the engine due to water ingression is not covered but if one takes an add-on cover for engine failure, they can claim a significant amount of repair expenses, he said.
One can also opt for consumables cover, which protects against the cost incurred for the replacement of engine parts, including engine oils and lubricants.

Other add-ons include roadside assistance, key and lock cover and loss of personal belongings.

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