As the name suggests, zero depreciation means that at the time
of claim, depreciation on these parts is considered zero and the claim is paid
in full (subject to the maximum declared value of the vehicle)
There are other add-ons to the ZERO depreciation cover - such as
consumable cover, return to invoice cover, etc.
The zero depreciation cover allows the car to be fully covered
without any deductions. Zero depreciation is an add-on to your regular car
insurance.
If you claim a basic car insurance policy, the insurance company
does not take into account the actual costs and only covers the depreciation
value of the car parts.
Zero depreciation car insurance covers the cost of repairing
fiber, glass, rubber parts and metal. The premium for zero depreciation car
insurance is slightly higher than the regular car insurance premium, but the
insured is entitled to 100% reimbursement if he makes a claim.
We can understand
zero-depreciation with an example
Suppose you bought a car worth INR 5 lakh. You decide to upgrade
your car model three years later and sell your original four-wheel vehicles.
However, it will sell for just INR 1 lakh or 2 lakh. What is the reason?
As time passes, each part of your vehicle will lose its value
and thus bring down the entire cost of your car. If you go ahead and file a
complaint, the insurer pays the amount based on the depreciation value of the
car's parts and not its current market value.
For most, this would be a financial loss. Eventually, a car
owner expected to get the current market price but forgot the depreciation
factor. Buying a zero depreciation rider with your car insurance is the best
way to protect you against such incidents.
A zero depreciation cover will pay all costs of external repair
or replacement without factoring in depreciation. It saves a lot of money for
you. This add-on cover is especially vital for those who own luxury cars that
may have to bear the cost of a bomb to fix.
Another example:
If you have purchased a new vehicle and bought a car not older
than three years, you can buy a zero depreciation car insurance package. If
your car is more than three years old, you will need to purchase a general car
insurance.
Zero depreciation comes with a limit on the number of car
insurance claims you can make annually to ensure that people do not make
frivolous claims. It varies from insurance to insurance company.
Who Should Buy Zero
Depreciation Car Insurance?
·
People with luxury cars
·
Who lives in areas that are prone to accidents?
·
If you are worried about small bumps and dents
·
If you have a vehicle with expensive spare parts
·
If you are not sure of your driving skills
Zero depreciation
car insurance does not cover certain conditions such as:
- Wear and tear
- Damage to
uninsured items like accessories and bi-fuel/gas kit, tires
- Damage due
to uninsured peril
- Loss due to
mechanical breakdown
Conclusion: A zero-depreciation
cover, also known as a zero-depreciation or bumper-to-bumper protection, covers
the entire cost of repairing and removing damage without taking into account
any depreciation of the price of the car's parts.
It usually comes as an 'add-on' with a comprehensive car
insurance policy. You cannot buy a zero depreciation cover with car insurance
that only covers third-party liability. Your dealer/agent may call it a
bumper-to-bumper policy or a zero depreciation policy.
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