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Car insurance is an essential part of vehicle ownership, providing a financial shield against unforeseen accidents, damages, and losses. However, not all insurance policies offer equal levels of protection. One add-on cover that has become increasingly popular among vehicle owners is zero depreciation insurance. This add-on ensures that the policyholder receives the full claim amount without deductions for depreciation, which can significantly reduce out-of-pocket expenses.
In this post, we’ll delve into the details of zero depreciation car insurance, its benefits, how it works, and why it is a must-have for new and luxury car owners. We’ll also explore the factors affecting its premium, what it covers, and tips for selecting the best zero depreciation policy.
Zero depreciation car insurance—also referred to as nil depreciation or bumper-to-bumper coverage—ensures that no depreciation is deducted during claim settlement. Standard car insurance policies factor in depreciation when calculating the value of parts that need replacement or repair. As a result, the policyholder often has to pay a portion of the repair costs out of their own pocket.
With zero depreciation coverage, the insurance company covers the full cost of parts replaced, irrespective of their age or wear and tear. This makes zero depreciation insurance an ideal add-on for anyone looking to minimise their expenses during claims. It is especially recommended for new cars or high-end vehicles where replacement costs can be substantial.
* Standard T&C Apply
The decision to opt for zero depreciation car insurance depends on multiple factors:
If you’ve just purchased a new vehicle, particularly a luxury car, opting for zero depreciation insurance ensures that you get the full value of any replacement parts during the early years of ownership.
If you reside in accident-prone or densely populated areas where the likelihood of minor accidents is higher, zero depreciation can save you significant repair costs.
First-time or inexperienced drivers may be more likely to damage their cars. Zero depreciation insurance ensures that the repair costs remain minimal.
Given the financial advantages and peace of mind that this add-on provides, it is worth considering for anyone with a car that is under five years old.
When you buy a standard car insurance policy, the insurer takes into account the age and depreciation of your car’s parts at the time of settling a claim. This means that older parts or those subject to wear and tear will have reduced value, and you’ll be responsible for covering part of the repair costs.
With zero depreciation car insurance, however, the insurer settles the claim without considering the depreciation of the car’s parts. This means that the policyholder receives a significantly higher payout, covering almost the entire cost of repair or replacement.
For example, if your car’s bumper needs to be replaced due to an accident, the insurer will typically apply a depreciation rate based on the bumper’s age. With zero depreciation, however, the full replacement cost is covered, ensuring that you don’t need to dip into your savings to cover the difference.
Opting for zero depreciation insurance comes with several tangible benefits:
One of the primary benefits is that you receive the full claim amount without any deductions for depreciation. This means that the insurer pays for the entire cost of parts replacement, ensuring that your out-of-pocket expenses are minimised.
Zero depreciation cover is particularly beneficial for vehicles with costly parts, such as luxury cars. Most components, including bumpers, glass, fibre, and rubber parts, are fully covered without considering their depreciated value.
Since you don’t have to bear the depreciation costs during repairs, your car is more likely to maintain its condition over time. This not only keeps the car in better shape but also helps retain its resale value.
If you live in areas with poor road conditions or high traffic density, accidents are more likely. In such cases, zero depreciation insurance becomes an invaluable tool in protecting yourself from frequent repair costs.
New car owners and those with high-end vehicles can especially benefit from zero depreciation cover. With expensive parts, even minor repairs can add up. Zero depreciation car insurance ensures that you are fully compensated for these costs for new cars under 3 years old.
*Standard T&C Apply
*Claims are subject to terms and conditions set forth under the motor insurance policy.
Under this policy, depreciation does not affect the claim settlement and full compensation is provided to the insured.
Cars less than 3 years old are only included and only new car owners can purchase it.
A zero‐depreciation cover does not cover normal wear, tear and mechanical breakdowns. Every policyholder is bound to pay ay a mandatory policy excess.
A zero‐depreciation add‐on cover has some claim limitations annually, though this might vary from one company to another.
Any damage to fibre, glass, rubber and plastic parts are borne by the insurer.
Zero‐depreciation covers generally have higher premiums in comparison to a normal car insurance cover.
Given the financial advantages and peace of mind that this add-on provides, it is worth considering for anyone with a car that is under five years old.
The premium for zero depreciation car insurance is typically higher than standard car insurance policies, but it is calculated based on several factors:
Zero depreciation is generally only available for cars that are less than five years old. As the car ages, the premium for this cover increases.
The cost of insuring high-end or luxury vehicles is higher due to the expensive parts and repair costs involved.
If you live in areas prone to accidents or vandalism, your premium may be higher.
If you have a history of making frequent claims, the premium for zero depreciation insurance may increase.
While the premium might be higher compared to standard policies, the benefits of zero depreciation in terms of claim settlements often outweigh the additional cost.
*Standard T&C Apply
*Claims are subject to terms and conditions set forth under the motor insurance policy.
Depreciation is the gradual reduction in the value of a car’s parts over time due to wear and tear, ageing, and usage. In a standard car insurance policy, insurers apply a depreciation rate to various components when settling claims. Below are the typical depreciation rates for car parts:
These depreciation rates significantly reduce the claim amount, which is why zero depreciation insurance is such a valuable add-on. By eliminating the impact of these depreciation rates, the policyholder receives a much higher settlement.
*Standard T&C Apply
Several factors affect the premium you’ll pay for zero depreciation car insurance:
Cars under three years old are eligible for zero depreciation cover. As the car ages, the risk of depreciation increases, which in turn raises the premium.
Luxury and high-end cars have more expensive parts, so the premium for zero depreciation insurance on such vehicles will naturally be higher.
If you live in an area prone to accidents or with poor road conditions, you may face higher premiums for zero depreciation car insurance.
Your driving history, including the number of claims you’ve made in the past, can impact your premium. A clean driving record may help reduce the cost.
*Standard T&C Apply
While both zero depreciation insurance and comprehensive car insurance offer extensive coverage, there are key differences between the two:
This type of insurance covers third-party liabilities, own-damage, and theft. However, during claim settlement, depreciation is factored in, which reduces the claim amount.
This is an add-on cover that can be taken with a comprehensive policy. It ensures that depreciation is not deducted, meaning you get the full value for parts during repairs.
For example, if your car’s bumper needs replacing, comprehensive insurance would factor in depreciation, whereas zero depreciation car insurance would cover the entire cost of the bumper without any deductions.
Getting zero depreciation insurance online is easy and convenient. Bajaj Allianz General Insurance Company offers this add-on through online portals. To get started, visit the Bajaj Allianz General Insurance Company’s website, select your base car insurance plan, and then choose the zero depreciation add-on. Read through the policy’s terms and conditions to ensure it meets your needs.
Renewing your zero depreciation car insurance online through Bajaj Allianz General Insurance Company is a seamless process.
A few weeks before your policy expires, log into your account on the Bajaj Allianz General Insurance Company’s website and opt for the renewal option. Ensure that you reselect the zero depreciation add-on, as it may not automatically carry over during renewal. Review the updated policy terms and premiums before confirming the renewal.
A zero depreciation add-on cover offers extensive protection for various car parts, ensuring you get full compensation during a claim:
These materials, which are highly prone to depreciation, are fully covered under zero depreciation.
Components like the windshield and windows are included, providing coverage for replacement costs without factoring in depreciation.
Expensive to replace, these are also covered under zero depreciation insurance.
Any metallic part of the car that needs to be repaired or replaced due to an accident will be covered without depreciation deductions.
While zero depreciation car insurance offers comprehensive protection, there are certain exclusions:
Any damage resulting from normal usage of the vehicle is not covered.
Issues related to the mechanical or electrical functioning of the car are not included.
Damages that are not a result of accidents, such as wear and tear from natural ageing, are excluded from the policy.
Vehicles used for commercial purposes are generally not eligible for zero depreciation cover.
The claim settlement process under zero depreciation insurance is typically smooth and straightforward. After filing a claim, the insurance company will assess the damage and calculate the repair costs. Unlike standard policies, the insurer will not deduct any amount for depreciation. This means that you’ll receive the full value of the parts being replaced, significantly reducing your financial burden.
However, it’s important to note that most insurers cap the number of zero depreciation claims allowed per policy year, so be sure to check your policy’s terms and conditions.
Here are a few tips to help you choose the best zero depreciation car insurance policy:
Most insurers offer zero depreciation cover only for cars under five years old. If your car is older, ensure that it still qualifies for this add-on before purchasing.
Look for an insurer that has a hassle-free and transparent claim process. This ensures that you won’t face any challenges when filing a claim.
Compare the premium costs for zero depreciation insurance across different providers to ensure that you’re getting the best deal.
Read through the fine print to understand what’s covered and what’s excluded in the policy.
Bajaj Allianz General Insurance Company is one of the top providers of zero depreciation car insurance in India. Our policies come with competitive premiums and a wide network of cashless garages, making the claim process fast and convenient. Additionally, Bajaj Allianz General Insurance Company offers excellent customer service, ensuring that your needs are met quickly and efficiently.
Opting for zero depreciation insurance with Bajaj Allianz General Insurance Company ensures that your car is well-protected, and you won’t have to worry about depreciation during a claim settlement. With this add-on, you can drive with confidence, knowing that your vehicle is covered comprehensively.
Zero depreciation car insurance is a valuable add-on for anyone looking to safeguard their car against the financial impact of depreciation. By ensuring that you receive the full claim amount without any deductions for depreciation, this cover helps you maintain the value of your car and reduces your out-of-pocket expenses during repairs. Whether you’re a new car owner or someone living in an accident-prone area, zero depreciation insurance provides comprehensive protection and peace of mind.
With Bajaj Allianz General Insurance Company offering this add-on, it’s easier than ever to ensure that your car is fully protected. So, when renewing or purchasing your next car insurance policy, make sure to consider the benefits of zero depreciation insurance and secure your vehicle’s future today.
You should consider buying zero depreciation car insurance because it provides comprehensive coverage by paying the full repair costs without factoring in the depreciation of parts. This is especially beneficial for new or expensive vehicles, as it ensures that you won't have to bear out-of-pocket expenses for depreciated parts. It effectively protects the value of your car and minimises financial loss during claims.
Yes, you are eligible for a No Claim Bonus (NCB) with a zero depreciation car insurance policy, provided you have not made any claims during the policy period. The NCB serves as a reward for claim-free years and can significantly lower your premium when renewing the policy. Even with the zero depreciation add-on, NCB benefits remain intact.
The Insured Declared Value (IDV) in a zero depreciation car insurance policy refers to the maximum sum the insurance company will pay in case of total loss or theft of your vehicle. It represents the current market value of your car, excluding depreciation. The IDV plays a crucial role in determining your premium and compensation during total loss claims.
To verify if your car insurance includes zero depreciation coverage, you can review the policy document provided by the insurer, particularly the section detailing add-on covers. Alternatively, you can log into your insurer's online portal and check your policy details. If you're still unsure, contacting your insurance provider directly can clarify whether the coverage is part of your policy.
No, third-party car insurance cannot be upgraded to include zero depreciation coverage. Zero depreciation is an add-on available only with comprehensive or own-damage insurance policies. Third-party insurance only covers liability towards third-party damages and injuries. To get zero depreciation coverage, you need to opt for a comprehensive insurance policy that includes own-damage protection.
Yes, zero depreciation insurance is often referred to as bumper-to-bumper coverage. This is because it covers almost all parts of the vehicle, including bumpers, without factoring in the depreciation of parts. Unlike standard insurance policies, zero depreciation ensures that the entire repair cost is covered, giving you maximum financial protection in the event of an accident.
The number of claims you can make under zero depreciation insurance varies by insurer, but most policies allow a limited number of claims, typically two per policy year. Some insurers may offer more or fewer claims, depending on the terms of the policy. It’s important to review your policy document to know the exact number of claims allowed under your plan.
Yes, tyres are covered under zero depreciation insurance, meaning that if your tyre is damaged and needs replacement, the insurance will cover the full cost without deducting for depreciation. This makes zero depreciation insurance highly beneficial for parts like tyres, which tend to wear out faster and can be costly to replace without this add-on.
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