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As a car owner, you should know zero-depreciation coverage

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.