Everything You Need To Know About ZeroDepreciation Car Insurance
In India, under the Motor Vehicles Act, 1988, it is mandatory for all owners to have valid car insurance always. Today, many insurance companies offer a variety of car insurance policies to suit the varying needs of people. With so many different options available, choosing the right insurance policy can be an overwhelming task.
Before you start looking for the best policy and the best insurance company, you must determine your needs and know your exact requirements. It can be quite frustrating to know that the car insurance you purchased offers only partial coverage. To avoid this unpleasant scenario, buy a zero-depreciation coverage on car insurance.
First, let’s look at the types of car insurance policies. In India, there are two types of care insurance policies – Third-party insurance and Comprehensive policy. The third-party insurance covers only the damages to the third-party vehicles and injuries. The comprehensive policy, on the other hand, covers both third-party liability and damages to self.
What is zero depreciation car insurance?
Zero depreciation or nil depreciation car insurance is an add-on cover that provides the complete coverage for the damage caused to your car. It reimburses repairs for the car without taking depreciation in consideration. Which means, the insurer covers the entire expenditure needed to repair the damage caused to the car.
Here is everything you need to know about zero depreciation coverage on car insurance.
Benefits of Buying Zero Depreciation Cover
- Usually, when a car meets an accident or gets stolen, the car insurance settles the cover taking into consideration the current value of the car that factors in depreciation. Whereas Zero Depreciation coverage on car insurance offers full settlement without considering any depreciation.
What are the Different Rates Of Depreciation?
You know, depreciation is the loss of value on the actual cost of the asset due to use over a period of time. Different materials and parts have different depreciation value that are decided by the insurance policy. The standard rates are 30% for fibreglass, 50% for parts having higher wear and tear like plastic or rubber in tyres, tubes, battery, etc. 0-50% for metallic parts depending on age of the vehicle.
How Much Additional PremiumNeeds to be Paid?
Premium paid for insurance is decided as per the Insured Declared Value (IDV) of the vehicle. This is the maximum amount the insured can claim in case of loss or damage to the insured vehicle. A general car insurance premium depends on location, model and age of the car. The additional premium of zero depreciation car insurance is 20% of a standard insurance policy. You can easily calculate zero depreciation car insurance premium calculator available on the websites of car insurance online to know the amount of premium you will bear.
What are general exclusions of car insurance?
Typically, the car insurance companies do not cover for damages due to:
- Wear and tear of any of the car parts
- Driving under the influence of alcohol or any other intoxicating substance
- Failure of electrical equipment
- Human-made situations like war, nuclear explosion, bio-chemical attack
- Collision while indulging in a race
What Is Excluded In Zero Depreciation Cover On Car Insurance?
- Accessories that are fitted additionally and are not a part of standard product are not covered in zero dep car insurance. For example, an externally fitted music player or the gas kit doesn’t get insured. Some insurance companies exclude batteries and tyres as well.
What Makes it an Ideal Choice?
- After suffering a dent on your precious vehicle, realising that your car insurance doesn’t cover the entire cost is the last thing you would want to hear. High rates of depreciation result in reducing the insurance claims mainly for plastic parts that suffer major dents in accidents. Choosing a zero-depreciation cover for car insurance lets you stay assured about getting full claim without any depreciation or deduction.
Choosing a zero depreciation car insurance is undoubtedly a wise decision considering all the benefits it provides.