Daily Cash Allowance and Spare Parts Repair in Car Insurance

Daily Cash Allowance is an add-on benefit one can take with a motor insurance policy. In this, the owner gets a fixed daily allowance for a certain number of days in one policy year if his/her car has to be taken to a network garage. ..Read More

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With Daily Cash Allowance cover, every individual owning this policy is liable to get an allowance of Rs.500 per day. This cover provides a fixed daily allowance to the insured to cover his daily travel expenses incurred for the period the individual's vehicle is under repair due to an accident. Get paid every day for a period of a maximum of 14 days. But this benefit is available under a comprehensive car insurance plan and only if the car is repaired at an authorized garage.

Daily Cash Allowance and Spare Parts Repair in Car Insurance

If your car is in the network garage for more than two days. However, the amount of compensation and the number of days can vary across different insurance companies. You can avail of this cover only if you hold a comprehensive car insurance plan and your car is getting repaired at an authorized garage.

What is Daily Cash Allowance Add-on?

Daily Allowance cover provides daily cash to the policyholders in case the car is in the network garages for more than two days. In India, the amount of cash allowance generally provided under this add-on is Rs. 500 for up to 14 days.

The amount of compensation and the number of days can vary across insurance companies. This benefit is payable only if the car is repaired at a network garage. This add-on comes into the picture generally for the people who are heavily dependent on one vehicle and in locations where public transport is not an option.

  • This cover helps you financially by offering a daily allowance for commute, hence reducing your financial stress at the time
  • Garage Cash cover is offered by insurers as an add-on plan for which you will have to pay an extra premium
  • Under the Garage Cash cover, you can only avail of the cover if you opt for a cashless claim. In the event of a mishap, you will have to get the car repaired at one of the insurer authorized garages to avail the benefits of this cover
  • As specified in your insurance policy document, you will have to leave your vehicle for repair at the authorized garage for a minimum number of days to avail the Garage Cash cover
  • In case of theft, as mentioned in your insurance policy document, you can avail the Garage Cash cover only if your vehicle hasn’t been recovered within the specified time
  • Only after your insurer approves of your claim can you start enjoying the benefits of Garage Cash cover.

How It Will Help In Daily Life?

Suppose Ms. Lalitha owns a MUV car. She has bought the Downtime Allowance Benefit add-on cover along with her Comprehensive Car Insurance policy.

Ms. Lalitha drives to work every day and taking a cab to work costs her Rs. 400. One day, her car meets with an accident where she suffered minor injuries, but the car was severely damaged. So, she got in touch with her insurer and sent the car for repairs to an authorized network garage.

Now, the problem is, how will she manage to travel to work without her car? She will have to spend over Rs. 400 every day to commute. And as the damage caused to the car was severe, it will take about a week for the car to get repaired.

This is where the daily allowance add-on comes into effect. With this add-on, Ms. Lalitha doesn't have to spend on the cab from her pocket as the insurance company will bear the cost according to the terms & conditions of the policy.

Why Daily Cash Allowance Cover is Important?

Accidents can happen with anyone and at any time. You can never think when your car will meet with an accident or get damaged. It does not matter whether you driving to work for an important meeting or are visiting your friends for a party.

All you can do is stay adequately prepared for an emergency with the help of a car insurance policy. Moreover, you can ensure additional coverage by adding essential motor insurance add-ons, such as daily cash allowance cover, to your policy and avoid facing any inconvenience resulting from the emergency.

The amount of Daily Cash Allowance as per the following table in case your vehicle is located up in an authorized garage/ service station for repairs of accidental damages covered under the Policy and the vehicle is essentially required to be laid up for more than 3 days at the garage.

The benefit shall be limited to a total 5 of days over the 3 days for accidental damage claims In case of theft of a vehicle the allowance is available for up to 10 days with an excess of one day only.

Allowance per day
IDV Metros Non Metro
up to Rs 5 lacs 750 500
Above Rs 5 lacs but less than Rs 10 lacs 1000 750
Above Rs 10 lacs 1500 1000

Benefits of Daily Cash Allowance Cover in Car Insurance:

Buying suitable, additional coverage with a car insurance policy is always beneficial for the policyholders. They can opt for various benefits that accompany the purchase of an Add-on. The Daily Allowance Add-on provides the following benefits if the policyholders purchase it with the comprehensive car insurance policy:

  • Convenient Commute
  • Helps You Save Money
  • Takes care of Travel expenses
  • Provide choice of alternative vehicle
  • Freedom of Choice.


  1. The vehicle is not over 5 years old counting from the date of first registration/invoice whichever is earlier.
  2. The claim for accidental damages is payable under the Policy.
  3. The benefit ceases the day the vehicle is ready for delivery after covered repairs.
  4. In case of theft and recovery before the expiry of 10 days the benefit shall be payable till the date of such recovery only. Benefit for a period of delay in taking delivery by the insured.

Who should buy this Cover?

1. People with Single Car: Working professionals who are dependent on one car only should buy this add-on as this is important for them and will be beneficial if their car is in the garage.

2. Those who do not prefer public transport: In many countries, public transport is in good shape however in India public transport is sometimes not clean and not safe which is the reason many people avoid traveling through buses and other modes of public transport.

Things to Remember at the time of Buying Daily Cash Allowance Cover:

The daily allowance add-on cover for car insurance comes with some specific terms and conditions.

  • Available Own Damage Cover, and Comprehensive Car Insurance Policy
  • Additional Premium
  • Network garages condition
  • Avail with Maximum Coverage Duration
  • Limited Claims

How to Buy Daily Cash Allowance Cover in Car Insurance?

Car insurance can be purchased online from the PolicyBachat portal in two easy steps. At PolicyBachat we cater unbiased comparison of quotes, a 24*7 customer assistance team your motive is to give our customers the right quotes with compare car insurance rates online.

You have the option to purchase this cover via the online mode or the offline mode while buying or renewing your car insurance policy. You can buy a Cover by following the below mentioned steps.

  • Go to compare car insurance quotes online at PolicyBachat.com
  • Fill in the required details and select your Car Model & Variant, RTO Location, Registration date, and Email address.
  • Click on the “START SAVING MONEY”.
  • Choose a Comprehensive Insurance plan.
  • Premiums with different insurance companies are displayed with low premiums.
  • Select the Daily Cash Allowance Cover from the available Add-ons
  • After that fill in the ‘vehicle owner details and personal details.
  • Purchase the best Car Insurance Policy using online payment
  • If any queries are raised call: 1800–123–4003.

How to Claim Daily Cash Allowance Cover in Car Insurance?

A claim against the daily Allowance in car insurance can be claimed when your car is static due to accidental damage, natural or man-made calamity like a tsunami, flood, bandh, riot, or strike that causes major damage to property, earthquake, and the imposition of curfew by a government authority, etc.

Here are the steps for claiming daily allowance Protection of your car insurance policy:

Step 1: Claim Intimation

Get in touch with the insurance company as soon as possible and inform them about the incident that caused the damage. The claim process can be different in the case of different insurance companies. A customer relationship manager of your insurer will guide you to raise a claim as per the procedure.

Step 2: Documents

Arrange the documents as conveyed by the insurer. Usually, a policyholder needs the following documents while raising a claim:

  • A duly filled claim form
  • A written application for claim
  • Copy of the First Information Report (FIR) if required
  • Copy of the Car Insurance Policy.
  • Copy of your Driving License
  • Any other documents as conveyed by the insurance company.
Companies IDV Plan Discounts Premiums
Reliance 3,63,366 1 Year Comprehensive
  • OD Discount
  • Commercial Discount
4648 View Plans
Edelweiss 3,84,741 1 Year Comprehensive OD Discount 4946 View Plans
United India 4,05,790 1 Year Comprehensive OD Discount 4819 View Plans
Oriental 4,29,067 1 Year Comprehensive Commercial Discount 3285 View Plans
Future Generali 3,80,184 1 Year Comprehensive
  • OD Discount
  • Commercial Discount
4896 View Plans
Royal Sundaram 4,35,775 1 Year Comprehensive OD Discount 5027 View Plans
Liberty 3,87,355 1 Year Comprehensive Commercial Discount 6884 View Plans


Thus, there are several add-ons that you can purchase to widen the coverage of your car insurance policy. You should ask the insurer about the terms and conditions of different add-ons before buying it. This will help you understand the add-on cover better, and you can make an informed buying decision. Also, you must assess your needs before buying an add-on and make the most out of it.

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