When it comes to protecting what matters most—your health, vehicle, or home—getting to grips with the difference between basic insurance and add-ons can make all the difference.
Basic insurance offers the essentials, covering key risks like hospitalisation, damage you may cause to another driver’s vehicle, or protection against common threats like fire and theft for your home. It’s the foundation you need, but it might not cover every scenario.
That’s where add-ons come into play! These optional extras give you tailored protection to meet your unique needs and situations. Think critical illness cover for health, roadside assistance for your car, or home contents insurance for your home. Below, we look at how to make the decision of getting add-ons or not.
What Is Basic Insurance?
First of all, you need to understand what basic insurance is. When it comes to your health, car, or home, they typically include:
- Hospital Plans: Covers in-hospital treatment for serious illnesses, accidents, and emergencies. It offers essential coverage for high-cost medical events but excludes many day-to-day medical expenses.
- Third party car insurance: Offers coverage primarily focused on protecting you against claims made by others. If you cause an accident and damage someone else’s vehicle or property, third-party insurance will cover the repair or replacement costs of that damage.
- Home Insurance: Protects your property against events like fire, theft, and natural disasters. It excludes the contents inside your home.
In most cases, basic insurance covers the essentials but may leave out certain features or benefits that could be important in specific situations.
What Are Insurance Add-ons?
Add-ons, also known as optional coverage, offer additional protection beyond the standard policy. These coverages allow you to customise your insurance plan based on your needs. Some common examples include:
Hospital Plan Add-Ons:
- Gap cover: A popular add-on that covers the difference between what medical practitioners charge and what your hospital plan pays, especially for in-hospital treatments.
- Chronic Illness Cover: This add-on covers chronic medications and out-of-hospital management for conditions not fully covered under Prescribed Minimum Benefits (PMBs).
Car Insurance Add-ons:
- Roadside Assistance: Provides services like towing, battery jump-starts, or flat tyre repairs when stranded on the road.
- Car Hire: Covers the cost of hiring a replacement vehicle while yours is being repaired after an accident.
Home Insurance Add-ons:
- Home contents insurance: To protect your belongings inside the home against theft, fire, and other risks.
When Should You Opt for Add-ons?
Add-ons can provide peace of mind, but they aren’t always necessary for everyone. Here’s how to determine if you need additional coverage:
- Hospital Plan Add-ons:
- When you require frequent coverage for day-to-day medical expenses like GP visits, dental care, or prescription medication, which are not included in your hospital plan.
- If you have a chronic illness that requires regular medication or treatment not covered by your basic hospital plan.
- Car Insurance Add-ons:
- If you drive frequently and want support for breakdowns, towing, or emergency services, this add-on provides peace of mind.
- When you need a replacement vehicle while yours is being repaired after an accident, car hire cover is a useful add-on
- Home Insurance Add-ons:
- If you want to protect the belongings inside your home, and not just your house’s structure. This is especially true if you live in a high-crime area
When Add-Ons Aren’t Enough
While add-ons can help, sometimes it makes more sense to upgrade to a higher-coverage policy instead.
For instance, instead of getting third party only car insurance with many add-ons, it might be more effective to upgrade to comprehensive car insurance. Or instead of getting a hospital plan with gap cover, you may want to get a more comprehensive medical aid plan.
Compare the cost of the add-on versus the price of upgrading to a higher-tier plan. If the upgrade provides significantly better value and broader coverage for a reasonable increase, upgrading might be the better option. By making savvy choices, comparing car insurances, and understanding how to blend basic insurance with these valuable add-ons, you’ll craft a robust plan that fits your lifestyle.
