Zero depreciation coverage, also known as the 'zero dep' policy,
provides full coverage without depreciation factoring. Here means that if your
car damaged after an accident, you would recover the total cost from the
insurer.
Most insurance companies will offer zero depreciation products
for the new vehicle, which is a little expensive but very useful. You need to
bear the 50 percent cost and depreciation of any fiber part and the cost of new
metal and electrical components in a comprehensive general policy. However, the
zero depreciation plans will save you from paying any additional amount to
compensate for the loss and the insurance company will cover the entire cost of
the fiber components and metal or electrical parts. The service is generally
available for vehicles up to 3 years old and, in some cases, up to 5 years of
age.
Factors
to consider before opting for zero depreciation cover
Before you choose zero depreciation, it is worthwhile to
consider the following factors-
Cost - A car insurance policy that loaded with zero
depreciation will cover more costs. Because it provides full coverage without
considering depreciation, it charges the premium slightly more than a
comprehensive plan.
The number of claims - Insurers usually limit
the number of car insurance claims to be made in a year. That is done to
prevent policyholders from complaining about each break. Check the number of
claims from your insurer and make sure to contact the insurer only when the
amount is significant.
Available for new cars - Zero depreciation is
available only for new vehicles.
Zero
depreciation cover vs. standard car coverage
Let's find out what the zero depreciation cover is different
from a standard insurance policy.
Zero Depreciation Cover:
- Claim
Settlement: Gives full settlement coverage and depreciation will not make
a dent
- Premium:
High
- Cost of
repairing and plastic fiber: Insurer bears the cost,
- Age of the
car: Normally covers only new cars
Normal Car Insurance:
- Claim
Settlement: Claim amount based on the current value of the vehicle, which
factors in depreciation
- Premium: Low
- Cost of
repairing and plastic fiber: Insured has to shell out money
- Age of the car: It can secure a vehicle that is more than three years old.
A car insurance plan mainly divided into comprehensive car
insurance and third party insurance policies. Comprehensive car insurance
covers damage to the car due to natural disasters, theft, accidents and so on.
A zero depreciation is only an add on coverage to this. When
making a claim, the insurance company pays for the depreciation value of the
damaged parts. If you take zero-dep protection, the insurance company will
pay the damages in full (as per market value). Even then, only a car that is
usually less than three years old will be able to take a zero dep.
Who
Should Buy Zero Deprivation Covers?
If your car is brand new, a zero depreciation cover is
recommended to protect against all risks and losses. Many believe that only new
drivers who are more prone to accidents should buy it. And, due to the
negligence of the driver of another car, even the most experienced drivers are
involved in accidents. For all car owners, therefore, a zero depreciation cover
is a must buy.
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