How Does a Zero Depreciation Cover Help During Car Insurance Claims?

The Motor Vehicles Act of 1988 requires all cars plying on Indian streets to have at least third-party liability car insurance. This insurance policy protects you from any liability arising out of an accident with a third person by your insured automobile. But what about damages to your vehicle? The third-party liability does not compensate you for damages to your own vehicle. If you do want protection for the damages to your car, you would have to buy a comprehensive motor insurance policy. With a comprehensive four-wheeler insurance policy, you not only get protection for third-party liability and own damage cover, but also you also have the option of enhancing its coverage by purchasing additional covers. If chosen correctly, these add-ons are quite beneficial. One such cover is the Zero Depreciation add-on. Zero Depreciation, also known as nil depreciation, is when you receive reimbursement for your car insurance claim without depreciation being considered on the repaired car parts. Generally, a car insurance cover without this add-on results in lower compensation due to the effects of depreciation on various car parts; hence, you receive a notably low claim amount. With a Zero Depreciation Cover, the effects of depreciation on car parts are nullified and the insurance company compensates you for the entire repair cost.

The uses of Zero Depreciation add-on cover:

1. Increases claim amount

When your insurance company considers depreciation, the claim amount is reduced considerably. However, if you have a Zero Depreciation Cover, the insurance pay-out increases. Your insurer will pay the majority amount required to repair the damaged parts except the policy’s deductibles. *

2. Affordable premium

People usually avoid purchasing this cover as they assume it to be expensive. On the contrary, this is not the case. The premiums are quite affordable. It is possible to compare the costs of the Zero Depreciation cover available on different policies online. You can then go for a plan, which offers you this add-on at the best rates. *

3. Helps save your money

Under your car insurance policy, if the zero-depreciation car insurance cover is missing, you need to shoulder the depreciation component during a claim. Hence, having this add-on helps you save money.

Impact of Zero Depreciation coverage

The impact of Zero Depreciation coverage on car insurance is significant, as it provides car owners with peace of mind knowing that they will not have to bear any additional costs during claim settlements. This type of coverage is especially beneficial for new car owners or those with expensive vehicles, as the cost of repairs for damaged parts can be substantial. However, it is important to note that Zero Depreciation coverage may not be suitable for everyone. Car owners who have an older car or those who do not drive frequently may find that the additional cost of this coverage outweighs its benefits.

Advantages of Zero Depreciation Car Insurance Add-on

Zero Depreciation coverage, also known as Nil Depreciation or Bumper to Bumper coverage, is an optional coverage that can be included in car insurance policies. This type of coverage has several advantages, including:

1. Comprehensive Protection

Zero Depreciation coverage provides comprehensive protection to car owners against the cost of repairs or replacement of car parts. It covers the full cost of repairs without any deductions for depreciation, ensuring that car owners do not have to bear any additional costs during claim settlements. *

2. Cost-Effective

Although Zero Depreciation coverage comes at a higher premium than traditional policies, it can be cost-effective in the long run. The cost of repairs for damaged car parts can be substantial, and the Zero Depreciation coverage ensures that car owners do not have to pay for these costs out of pocket. *

3. Suitable for Newer Cars

This type of coverage is especially beneficial for new car owners or those with expensive vehicles. Newer cars tend to have higher repair costs, and Zero Depreciation coverage provides complete protection against these costs. *

4. Peace of Mind

Knowing that all repairs will be covered under the Zero Depreciation coverage, car owners can enjoy peace of mind while driving their vehicles. *

What is Covered and Not Covered in a Zero Depreciation Add-on Cover?

This type of coverage covers the cost of repairs or replacement of car parts without factoring in the depreciation of these parts. However, there are certain items that may or may not be covered under Zero Depreciation coverage.

What is Covered

1. Plastic, rubber, and fibre components

Zero Depreciation coverage typically covers the cost of repairs or replacement of plastic, rubber, and fibre components, such as bumper, windshield, mirror, etc. *

2. Glass components

The cost of repairing or replacing glass components, such as front and rear windshields, door glasses, etc., is usually covered under Zero Depreciation coverage. *

3. Paint

The cost of repainting the car due to accidental damages is covered under Zero Depreciation coverage. *

What is Not Covered

1. Regular maintenance

Zero Depreciation coverage does not cover the cost of regular maintenance, such as oil changes, tire rotations, etc. *

2. Mechanical and electrical breakdown

Zero Depreciation coverage typically does not cover the cost of repairs for mechanical and electrical breakdowns that occur due to wear and tear or other factors. *

3. Damage due to driving under the influence

Damage caused to the car while driving under the influence of alcohol or drugs is not covered under Zero Depreciation coverage. *

4. Consequential damages

Zero Depreciation coverage does not cover the cost of damages that occur as a result of an accident, such as loss of use, loss of income, etc. * It is important to note that the exact coverage and exclusions may vary depending on the insurance provider and the terms and conditions of the policy. Car owners should carefully read their policy documents and consult with their insurance provider to understand the exact coverage and exclusions under their Zero Depreciation add-on cover.

Here’s what you should keep in mind while purchasing the Zero Depreciation add-on

You must buy this cover especially if your car is brand new and the parts are expensive. If you own a premium car, the spare parts will cost more. And if you do not have a Zero Depreciation Cover, the costs of repairing these parts would be way too high. Therefore, don’t think twice and buy the Zero Depreciation Cover. It proves to be beneficial during the car insurance claim process and increases the claim pay-out. With its help, you will be able to make the most out of your premiums. Go online and look at the various car insurance companies that offer you the Zero Depreciation add-on. After including the add-on cover in your comprehensive car insurance policy, make sure you calculate the premium online so that you know the additional cost on your policy.

Frequently Asked Questions

1. Is Zero dep policy transferable to another owner?

The transferability of Zero Depreciation policy may vary depending on the insurance provider and the terms and conditions of the policy. In most cases, Zero Depreciation coverage can be transferred to another owner if the car is sold. However, there may be certain conditions that need to be met to transfer the coverage. For example, the transfer may be allowed only if the new owner is a family member of the original owner, or if the car is being sold to a dealer or a certified pre-owned car seller. Additionally, the premium for Zero Depreciation coverage may change after the transfer, as the premium is calculated based on various factors, such as the age and condition of the car, driving history, and location. It is important for car owners to check with their insurance provider to understand the terms and conditions related to the transferability of Zero Depreciation coverage. They should also ensure that the new owner is aware of the terms and conditions of the policy and the coverage offered, to avoid any confusion or disputes in the future. *

2. Can commercial vehicles be covered by Zero Depreciation?

Yes, commercial vehicles can be covered by Zero Depreciation coverage, depending on the insurance provider and the terms and conditions of the policy. Many insurance providers offer Zero Depreciation coverage for commercial vehicles, such as trucks, buses, taxis, etc. This type of coverage can be especially beneficial for commercial vehicle owners as the cost of repairs and replacement of parts can be high. Zero Depreciation coverage can help provide comprehensive protection against these costs and ensure that commercial vehicle owners are not burdened with additional expenses during claim settlements. *

3. Are Only new cars eligible for Zero Depreciation coverage?

No, new cars aren’t the only ones eligible for Zero Depreciation coverage. While Zero Depreciation coverage is commonly offered for new cars, it may also be available for used or pre-owned cars, depending on the insurance provider and the terms and conditions of the policy. However, the eligibility criteria for Zero Depreciation coverage may vary for used or pre-owned cars. The insurance provider considers factors such as the age of the car, the condition of the car, the mileage, etc. before offering Zero Depreciation coverage. In some cases, the coverage may be offered only for cars that are less than a certain age or have driven less than a certain number of kilometres. * Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale. * Standard T&C Apply ##All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply