All about Zero Depreciation Car Insurance

1. Know all about Zero Depreciation Car Insurance We all know that a car is a depreciating asset. With every passing year, the value of your car depreciates. Due to the factor of depreciation, your claim settlement is highly affected and you would have to bear the out of pocket expenses. Even if you have a comprehensive car insurance, your insurer would hand you over a bill, asking you to bear a hefty pay. This is when the zero depreciation add-on cover proves to be beneficial. Want to know how? Read on to understand all about zero depreciation in Car Insurance. A zero depreciation cover is an add-on cover that offers comprehensive coverage to your car without factoring the element of depreciation. This type of cover is also known as bumper to bumper cover and nil depreciation. Even if your car gets damaged following a collision, then this add-on will cover costs for the same. Why is Zero Depreciation Cover So Important? A standard comprehensive car insurance policy does not provide coverage for regular wear and tear of the vehicle. The depreciation rates under a comprehensive policy are: On rubber, nylon, and plastic parts, and batteries – 50% depreciation be deducted, On fiber glass components – 30% depreciation be deducted, and On wooden parts – depreciation be deducted as per the age of car (such as 5% in the first year, 10% in the second year, and so on.) In case of a claim, the insurer reimburses only the depreciated value of the car parts. This can turn out to be really expensive, if you have a brand-new car.

2. So, here’s why having a zero depreciation cover is better than a comprehensive car insurance cover: Parameters Claim settlement Zero Depreciation Cover Offers complete coverage without factoring in the depreciation element Comprehensive Cover Claim amount is processed as per the current value of the vehicle and depreciation factor is calculated Premium is low compared to zero depreciation cover Policyholder has to bear the expenses Can be purchased for cars less than 15 years Premium Premium is high Cost of Repairing and Plastic, Fiber Components Age of the car Insurer bears the cost Usually covers new cars up to 3-4 years of age Benefits of Zero Depreciation Cover Zero Depreciation Car Insurance helps you enhance your car insurance coverage, thereby providing complete coverage Excludes the standard depreciation rates You don’t have to pay for the damages from your pocket Who Should Buy Zero Depreciation Cover? People with luxury cars or new cars New/inexperienced drivers People residing in accident-prone areas If you have a car with expensive spare parts Factors That Affect Zero Depreciation Car Insurance Premium? Age of the car Model of the car Your location Exclusions of Zero Depreciation policy? Zero depreciation cover does not cover costs for accessories that are not a part of standard product Damages to tyres or car batteries is not covered Damage in car engine due to water ingression or oil leakage is not covered Mechanical breakdown of the car and costs for consumables and oil change is not provided. Note:Few insurance companies have a limitation on the number of claims you can make under zero depreciation cover. So, always check the policy wordings for exact details.