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Not insuring your car keys can cost you heavily now

If you have a car with remote-key/keyless FOB, taking insurance cover for your car keys becomes important. A car key insurance add-on in your policy covers the cost of replacing complete key lockset in a situation where you have lost your car keys.

, ET Online|
Updated: Nov 19, 2019, 12.31 PM IST
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By paying a small amount of add-on premium, you can cover the huge replacement cost of your car keys.
While most people insure their cars, insuring the keys is not a common practice because of the belief that replacing lost car keys is not expensive. However, this is where most people err. While cost of replacing keys of manual locking cars is comparatively reasonable, the cost of a new set of keys for remote or keyless locking cars can cost between Rs 8,000 for high-end cars like Hyundai Verna, Volkswagen Polo and up to Rs 1 lakh for premium cars like Fortuner. This is why those buying cars with remote locking or feature-laden locking systems should seriously consider insuring their car keys.

Additionally, if you think that you can avoid replacing a lost car key be aware that incase of your car is stolen you insurance claim for the same is can be rejected by the insurer if you don't posses all the keys to the car. Read "Insurance company can reject claim for stolen car if you don't have all keys" for more details.

You should be aware that most car policies do not cover loss of keys. In order to insure the keys, one has to buy an add-on rider wherever offered. Generally, the cost of this rider varies between Rs 100 and Rs 300 depending on the car model/variant.

Why has car key insurance become important?
With advancements in technology, several high-end cars are coming up with remote key lock system or a keyless Frequency Operated Button (FOB).

FOB is a keyless remote system based on a new technology which completely controls the car's lock and unlock functionality through a keyless remote. You do not require a key to start the car, the vehicle starts with a push-button instead.

Such advanced technology is the reason why high-end car keys are expensive.

So, if your high-end car's remote key/keyless FOB gets damaged/misplaced and you want to get it replaced from the authorised Original Equipment Manufacturer (OEM) service center, it can be a costly affair as not only is the product is expensive, it also requires a more skilled mechanic to replace your car key lockset.

Why replacement of remote key/keyless FOB is expensive?
For safety concerns, if your remote-key/keyless FOB gets stolen, damaged or lost then you should completely replace the remote-lock system of your car as it is an integral part of the remote-lock system.

Amit Bhasin, Co-founder, GoMechanic, an automobile repair and service solution firm, said, "The remote-key/keyless FOB and remote-lock system work on the principle of radio transmitter because of which you can easily lock and unlock, operate other functions like the closing of windows and roof when remotely locking the car, from a distance." He said, "The radio transmitter of the car works within a general range of 10-20 meters."

Every remote-key/keyless FOB has a unique computer-code which is matched with the code present in the remote-lock system of the car. Thus, your car cannot be unlocked by another remote-key/keyless FOB. If you try to open the car manually with a different key, the remote-lock system will detect the code error and your car alarm will be set off.

Some remote-keys/keyless FOBs also have separate buttons to set off the car alarm, unlock the boot of the car, help your car to move back and forth when parked in a congested area.

Bhasin said, "Many safety and convenience features incorporated in the car can be controlled via remote-key when you are away from your car at a certain distance. However, these features vary across brands and models of cars hence. Due to this the cost of keys vary accordingly."

So, the more features are enabled in your remote-lock system and remote-key/keyless FOB, the more will be its cost of replacement.

What car-owners should do
If you have a car with remote-key/keyless FOB, taking insurance cover for your car keys becomes important. A car key insurance or a key and lock replacement insurance add-on in your motor policy covers the cost of replacing your complete key lockset in a situation where you have lost your car keys or the same has been stolen or where the lock has been damaged due to accident/theft.

Cost of key insurance
What you must know is that the 'key and lock replacement insurance add-on' premium cost in a motor insurance policy is relatively much lower than the cost of replacing of the damaged car lockset. Sajja Praveen Chowdary, Head- Motor Insurance, Policybazaar.com, said that in case of theft or loss of computer-coded or encrypted keys, one needs to get the replacement done by an authorised OEM service center which may cost you Rs 4,000-10,000 or even more depending on the car, make, brand and model of the car. "But, the 'key and lock replacement insurance cover' will only cost you around an additional premium of Rs 100-300 in your motor insurance policy. The cost of add-on premium varies depending on the car make variant," he said.

So, paying a small amount of add-on premium cost in your motor insurance policy can cover the huge replacement cost of your car keys. However, reimbursement of the replacement cost is subject to the maximum sum insured you have purchased under the car key protection add-on cover.

If only car locking system is damaged
What happens if the key is not lost but only the car's lockset gets damaged, will it be covered under insurance?
Rakesh Goyal, Director, Probus Insurance, a Mumbai-based insurtech, said, "The comprehensive insurance policy doesn't cover the repair cost of the car lockset if the car's lockset gets damaged due to an unfortunate accident. Most insurers neither cover the repair nor the replacement cost for the lockset damages even if it is caused due to the accidental damages under the motor insurance policy."

Hence, you must understand that not insuring your car keys can cost you heavily, that is, without a key replacement add on cover.

What if you don't replace the lost key and run the car using the spare
What if you lose one of your high-end car keys and because of high replacement cost do not get the lockset replaced from the authorised OEM service center or general car repair workshop to get back two new car keys? In such a scenario if your car gets stolen, you can be in big trouble as the insurer may ask you to show the two car keys before processing the claim. If you do not do so, your claim can get rejected.

Cost of replacing keys from authorised dealer or local garage
When your high-end car key gets damaged or stolen, due to security concerns, you generally need to replace the complete remote-lock system of your car along with the new set of keys, because the keys are actually a part of the remote-lock system.

The cost of the new remote-lock system along with the new set of remote-keys vary if you get it replaced from the authorised OEM's service center or general car repair workshop. However, if your high-end car's keys are covered under a motor insurance policy, then it will not be a problem. You can get it replaced from any workshop and claim a reimbursement from the insurer.

Animesh Das, Head of Product Strategy, Acko General Insurance said that claim settlement process will not be different whether you get your lock set replaced from authorised OEM service center or a general car repair workshop. "Once your lockset is replaced, you need to submit the bill of the replaced remote-lock system to the insurer for reimbursement claim." He said, "The settlement will, however, depend on the cost of replacement subject to the maximum sum insured purchased by you under the car key protection cover," he explained.

He further said, "There are few companies who may offer you cashless settlement but, in that case, you need to visit the nearest network garage to get your car key lockset replaced.

The following tables (1,2 and 3) show the cost of replacing keys and lockset by authorised OEM cost and at local garage for keyless FOB lockset, remote-key lockset, manual key lockset of five different brands.

1. Keyless FOB lockset* replacement
S.No. Brand Make- (Top variant model) Authorised OEM service center (Keyless Fob) (Rs) Car repair workshop (Keyless Fob) (Rs)
1 Maruti DZire 3,500-4,000 N.A.
2 Volkswagen Polo 12,000-14,000 8,000
3 Hyundai Verna 16,000 8,000
4 Toyota Fortuner 80,000 – 1 lakh (including immobilizer) 8,000
5 Mahindra XUV 500 12,000 8,000

2. Remote-key lockset* replacement
S.No. Brand Make- (Mid variant model) Authorised OEM service center (Remote-key) (Rs) Car repair workshop (Remote-key) (Rs)
1 Maruti DZire 7000-8000 5500-6000
2 Volkswagen Polo 18,000 - 20,000 8000-8500
3 Hyundai Verna 25,000 8500-9000
4 Toyota Fortuner 80,000 – 1 Lakh (including immobilizer) 22,500 - 23,000
5 Mahindra XUV 500 14,000 - 15,000 11,000 - 11,500

3. Manual key lockset* replacement
S.No. Brand Make- (Base variant model) Authorised OEM service center (Manual-key) (Rs) Car repair workshop (Manual-key) (Rs)
1 Maruti DZire 2,500-3,000 2,500-3,000
2 VW Polo 3,000-3,500 3,000-3,500
3 Hyundai Verna 3,000-3,500 3,000-3,500
4 Toyota Fortuner 4,000-4,500 4,000-4,500
5 Mahindra XUV 500 4,000-4,500 4,000-4,500
Note: You need to submit a copy of your RC, Vehicle Booklet, FIR documents at authorised OEM service center in the case of a keyless FOB lockset replacement. Also, these prices are indicative only, they may vary from model to model. The cost of replacement of keys is taken from authorised OEM service and a workshop located in Delhi. *The lockset includes two new keys. Data as on 31-October-2019| Source: Carpathy.com

Broadly, these lock systems differ according to the three types of car variants. The top variant of cars come with a keyless FOB remote-lock system. The mid-variant of cars come up with the remote-key lock system and the base variant of cars come up with a manual-key lock system.

Bhasin said, "You must keep your remote-keys/FOB safe when buying a high-end car - especially top variant car. It poses an additional risk of the car being stolen as the lost keyless FOB would still work unless it is deactivated by especially reaching out to the manufacturer." He said, "For luxury cars like BMW, Audi, Mercedes, etc., the replacement cost of keyless FOB lock set at authorised OEM generally cost around Rs 40,000 to Rs 50,000, and at the general car repair workshop (located in Delhi) it will cost you around Rs 20,000 to 25,000, depending on the car variant."

Are duplicate car keys an option?
What if you do not want to replace the complete manual-lock/remote-lock system of your car instead you only want a duplicate manual key/remote-key/keyless FOB to be made from car repair workshop?

Akshat Lavania, Co-founder, Carpathy, an automobile repair and service solution firm, said, "You must know that authorised OEM service centers generally do not provide you with a duplicate key. However, if you want duplicate car keys made, you can get it made from a general car workshop. These car keys are not secure as code of your remote-lock system is known by the car repair workshop who is not an authorised person." He said, "A car key, however, can only be made if you have another original car key present with you."

You can get duplicate car keys made from a general car repair shop which will cost much less than replacing the complete lock set, except in case of keyless FOB, but you run several risks when you go for this option.

Firstly, the local garage would know the secret code of your new key. Further, your lost keys may also fall into wrong hands and be used to steal your car. Therefore, the safer option is to get the entire lockset replaced at the authorised OEM dealer or standardised multi-brand workshop. As this option is normally expensive, car key insurance for high end cars can be of help.

"For security purposes, we would always recommend you change/replace the complete remote-lock system of your car with a new lockset when your car keys are stolen or damaged," Lavania said.

Point to note
  • If you are getting a duplicate key made, you need to report it to the police and get the copy of FIR (First Information Report). Also, inform the insurer about the loss of key(s).

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