Definition
Add-On Cover
An add-on (or rider) cover is an optional enhancement bought with a base policy to widen protection for an extra premium.
In motor insurance, popular add-ons include zero depreciation, engine and gearbox protection, return-to-invoice, roadside assistance, consumables cover and NCB protection, each addressing a gap in the base own-damage cover. They meaningfully raise the premium but can sharply improve claim payouts.
In life and health insurance the equivalent is a rider, such as critical illness, accidental death or waiver-of-premium riders attached to a base policy. Choosing add-ons sensibly, only those that match real exposure, gives better value than buying every available enhancement.
Related terms
- Zero Depreciation CoverZero depreciation (also bumper-to-bumper) is a motor add-on that waives depreciation on replaced parts, so the insurer pays the full cost of new parts in an own-damage claim.
- NCB ProtectionNCB protection is a motor add-on that preserves the accumulated no-claim bonus even after the policyholder makes a permitted number of claims.
- Return to InvoiceReturn to Invoice is a motor add-on that pays the original invoice value of the vehicle, rather than the depreciated IDV, on total loss or theft.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.