Conformance to ISO26262 functional safety standard involves inclusion of safety mechanisms which are necessary to reach defined targets for safety critical applications. ‘Diagnostic coverage’ (DC) is a measure of the effectiveness of safety mechanism against faults of the E/E components. The ISO 26262 standard provides standard guidelines for choosing possible safety mechanisms for reaching the target safety metrics. But while calculating the DC for these mechanisms, it only considers the base failure rate of the elements. In practical scenario, each safety element undergoes different types of stresses throughout the lifetime of the product. Also, to achieve the required target of safety metrics, multiple safety mechanisms are added in the design which sometimes unnecessarily increases the complexity and cost of the product development. To monitor the effect of stresses and take preventive actions accordingly different condition-based monitoring techniques are widely used in the automotive industry. In this paper, our aim is to propose an additional approach to improve the practical diagnostic coverage of a system by using condition-based monitoring as a safety mechanism to detect the health of the elements which helps the system to transit to a safe state. Thus, depending on the health of the elements, system can take alternate safe state or degradation strategy if required for avoiding the hazard.