Car insurance policies come with various add-ons which enhance the scope of coverage available under the plan. These add-ons promise additional benefits in the policy and make vehicle insurance more comprehensive. One of the most popular add-ons is the zero depreciation cover. The cover is advised for your car as it increases the amount of claim payable. While zero depreciation car insurance is beneficial, do you know all the details pertaining to this cover? In this article, we will discuss the various benefits provided by a Zero Depreciation Add-on cover.
What is Zero Depreciation Cover?
When a vehicle insurance claim occurs, the claim is paid for the actual value of the parts which are repaired or replaced. The actual cost is calculated after deducting depreciation from the parts repaired. This deduction for depreciation reduces the claim amount considerably. Zero depreciation cover nullifies the effect of depreciation. When the cover is bought, the company pays the entire amount of the parts damaged without factoring in depreciation.
Benefits of Zero Depreciation Car Insurance
Zero depreciation cover is a very useful add-on because of the benefits it provides. Here are three benefits of the cover –
#1 It increases the amount of claim payable
Do you know the depreciation rates applicable on your car’s parts? Here they are –
|Parts of the car||Depreciation rate|
|Plastic, nylon and rubber parts||50%|
|Wooden and metallic parts||Depends on the car’s age. 5% in the first year, 10% in the second year and so on|
These rates reduce the claim considerably. For instance, if, the repair cost for plastic parts of the car amount of INR 20, 000, the claim would be INR 10, 000 only. But when the zero depreciation cover is bought, the claim increases. In this instance, the company would pay the whole claim of INR 20, 000 incurred on the car’s parts and not deduct the depreciation amount. Thus, zero depreciation cover increases the claim amount of the vehicle insurance policy.
#2 It saves your hard-earned money
By increasing the amount of claim payable under the vehicle insurance policy, zero depreciation cover saves your money. Without the cover, the unpaid portion of the claim is to be paid by you. Since the repair costs are quite high, you might end up paying a lot of money in the absence of a zero depreciation cover. So, the cover helps in saving your hard-earned money if you choose it when you buy car insurance online.
#3 The cover comes cheap
If you are wondering about the additional premium payable for the zero depreciation cover, you can relax. The premium is very low and affordable. It is different across different plans. You can also compare the premium rates of the cover across various plans when you buy car insurance online. After comparing, you can choose the plan which offers the cover at the lowest premium rate. Thus, by paying a little additional premium for the cover you can get a comprehensive car insurance policy.
Things to remember before buying Zero Depreciation Add-on
Zero depreciation cover is available for cars which are not more than 5 years old. In fact, the cover is essential for new cars whose parts are expensive. Moreover, if the car is a premium car, the cost of its spare parts would be quite high. Paying for the huge depreciation costs on such premium parts would be a financial nightmare if the zero depreciation cover is not opted for. Therefore, a zero depreciation cover is the most advised and a relevant cover for your vehicle insurance. It proves very useful at the time of a claim and increases the claim payout helping you save thousands on the claim yourself.
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