Know about zero depreciation car insurance policy
Know about zero depreciation car insurance policy 09thAugust 2021
Does the depreciation value of your car scare you? Do you feel that you will have to empty your pockets for your car's damages once it gets old? Now, there is a one-stop solution for these queries – a zero depreciation policy. In a zero depreciation policy, the insurance company covers the expenses of physical damage caused to the vehicle in the unfortunate event of an accident without considering any kind of depreciation.
Vehicles are naturally depreciating assets, meaning, with every new car, there will only be a devaluation in the price over time. The parts like mirrors, metal, rubber, plastic and other car accessories are subjected to depreciation.
Zero depreciation car insurance vs regular car insurance:
Let us quickly compare the benefits of zero depreciation insurance to regular insurance.
Premium: The premium cost payable for zero depreciation insurance is slightly higher than that of regular car insurance. The depreciation policy premium varies with attributes like your address, the model, and your car's age.
Claim settlement value: In zero depreciation cover, the claim settlement amount is higher since the calculation of depreciation is not done, whereas, in regular car insurance, the claim settlement amount is received with a deduction of depreciation.
Repairing amount: In zero depreciation insurance, the repairing cost of parts like rubber, glass, plastic is paid by the insurance company, whereas these costs are borne by the insurance holder in regular car insurance.
Usage duration of the car: This factor does not make a difference in zero depreciation insurance because any depreciation is considered nil. However, in regular insurance, the depreciation rate of your vehicle keeps increasing day-to-day.
Benefits of a zero depreciation insurance: Let us now understand the benefits of zero depreciation insurance.
Easy claim: It ensures the timely and straightforward settlement of all expenses providing the insured with easy claim settlement.
Covers all expenses: The insurance company gives you total coverage of the costs that are heavy on your pocket, as well as any other miscellaneous charges during the time of settlement.
Profit while claiming: Zero depreciation policy adds more value to the basic coverage at the time of claim, making your expenses amount almost nil, hence leaving you with a profit.
Assurance: Since the vehicle has a zero depreciation insurance cover, so you have the satisfaction of being safe under a protective layer of the insurance policy.
What is not a part of a zero depreciation policy? Following are the factors that will restrict your complete claim on the advantages of a zero depreciation car insurance policy.
No driver's license: If the driver or owner of the vehicle does not have a valid driver's license, they are not eligible to claim the benefits of this policy.
Drunk driving: Immediate rejection of claim benefits happens if the driver happens to be under the influence of alcohol or any other intoxication.
Maintenance of engine oil: Unfortunately, this policy does not cover your regular maintenance such as engine oil, coolants, etc.
Compulsory deductibles: Compulsory deductible is a mandatory amount set by the IRDAI depending on the engine capacity of a vehicle. This amount is not a part of the zero depreciation policy.
For cars more than five years old: If the insured vehicle is aged more than five years, it cannot opt for a zero depreciation policy.
Mechanical expenses: Occasional breakdowns and arbitrary wear and tear of the vehicle will not be covered in the policy.
To sum it up, zero depreciation benefits a wide array of car owners considering the cost-effective claim settlement and boosting their regular insurance plans in the form of a worthy add-on.