The Importance of Having Zero Depreciation Car Insurance

Anything that has a ‘free’ or ‘zero’ tag attached to it catches the eye! Well if you are unaware about zero depreciation in your car insurance, then here’s what it is all about -

But first, what is depreciation?

Depreciation is defined as the decrease in the value of the vehicle over time due to age, and wear and tear. As your car ages, its market value goes down and so does the claim amount that you get.

Now to zero depreciation cover.

A zero depreciation cover can be added to your car insurance at an extra cost. This cover ensures that in case of an accident, you get reimbursement for the parts replaced without any deduction for depreciation.

Let us Look at the Importance of Zero Depreciation Through an Example

Mr. A met with an accident while returning from the office and his old car suffered some serious damages. He expected that he will get a high claim amount for it. What he did not take into account is the fact that his car was old and its value had depreciated. And since he hadn’t read the policy terms and conditions, he was left in a pickle. On the other hand, is Mr. B who faced a similar scenario, but owing to the fact that he had zero depreciation cover on his car insurance and was well-versed with the policy terms and conditions, his out-of-pocket expenses were next to none at the time of getting his car repaired.

How is a Car Insurance Policy with Zero Depreciation Different From a Standard One?

Well to start with, the most obvious difference is that a policy with zero depreciation does not involve depreciation and is conceptualized for full settlement. In comparison, a standard cover offers a claim based upon the current value of the car, i.e. after depreciation. So it is but obvious that if your car suffers damage due to an accident, your standard policy will reimburse the claim minus the depreciation whereas the policy with zero depreciation will address the claim regardless of the current value of your car.

Factors to Consider Before Choosing Zero Depreciation Cover

By now, you must have got an idea about why a zero depreciation cover is a worthwhile option to consider. But before you make any changes to your car insurance policy, here are some things you ought to know -

  • You Can Access this Cover for Car as Old as 10 Years

We at IFFCO Tokio provide the zero depreciation rider for cars which are up to 10 years old, making this insurance rider a highlighted of our car insurance policies. 

  • The Premium is Higher

You must consider the premium paid for a car insurance policy that has zero depreciation cover attached to it. As compared to a standard insurance policy, a zero depreciation insurance policy costs more. The reason for that is quite obvious - it delivers full coverage without considering depreciation.

  • There is a Limit on the Number of Claims

Insurers put a cap on the number of claims you can make with your zero depreciation cover. It is done to keep policyholders from filing a claim for even a small dent. So before you buy a zero depreciation cover make sure you check with your insurer about the number of claims you can make in a year. However, we at IFFCO Tokio are the exception to the norm as our car insurance policies don’t have any limit on the number of claims you make.
Read for more tips on how to claim car insurance

**To understand exactly about the policy coverage, exclusions, etc. read the Policy Wordings carefully.**

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