Zero Depreciation Car Insurance

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What is Zero Depreciation Car Insurance?

What is Depreciation?

% of Depreciation in Vehicles

Age of Vehicle

% of Depreciation

Not Exceeding 6 months

5%

Exceeding 6 months but not exceeding 1 year

15%

Exceeding 1 year but not exceeding 2 years

20%

Exceeding 2 years but not exceeding 3 years

30%

Exceeding 3 years but not exceeding 4 years

40%

Exceeding 4 years but not exceeding 5 years

50%

% of Depreciation in Vehicles (Metallic Parts)

Age of Vehicle

% of Depreciation

Below 6 months

Nil

Exceeding 6 months but not exceeding 1 year

5%

Exceeding 1 year but not exceeding 2 years

10%

Exceeding 2 years but not exceeding 3 years

15%

Exceeding 3 years but not exceeding 4 years

25%

Exceeding 4 years but not exceeding 5 years

35%

Exceeding 5 years but not exceeding 10 years

40%

More than 10 years

50%

Benefits of Zero Depreciation Car Insurance Addon

Save Money

Having a Zero Depreciation Addon ensures that you do not have to shell out money from your pocket in case there is a claim, as without a Zero Dep addon the cost of depreciation of the parts has to be borne by you. But with a Zero Dep Addon, that is taken care by your insurance company.

Get a Higher Claim Amount

Securing your car with a zero depreciation add-on means the depreciation on your car’s parts won’t be calculated and hence you’ll receive a higher amount during claims. 

Peace of Mind

Opting for a zero depreciation addon ensures you don’t unnecessarily spend from your pocket during claims and honestly just being assured that someone will have your back during your unfortunate times can be so satisfying and really gives you some peace of mind.

What is not covered in a Zero Depreciation Addon?

Driving without a Driver’s License

You won’t be applicable to receive the benefits of a zero depreciation addon if you don’t have a valid car license.

Cars More Than 5 Years Old

Unfortunately, a zero depreciation addon cannot be opted for if your car is more than five years old. 

Driving Under the Influence of Alcohol

Those driving under the influence of drugs or alcohol are excluded from benefiting from a zero-depreciation cover during claims. 

Doesn’t Cover Compulsory Deductibles

A zero depreciation cover doesn’t cover for your compulsory deductibles (if any) included in your car insurance plan. 

Doesn’t Cover Mechanical Breakdowns

As a standard rule, a zero depreciation cover won’t cover for mechanical breakdowns or normal wear and tear of your car.

Cost of Engine Oil

This addon doesn’t cover for costs such as engine oil, clutch oil, coolant, etc.

How much will a Zero Depreciation Addon Cover Cost? Is it worth it?

What are the factors affecting your Zero Depreciation Car Insurance Premium?

Following are the factors that will affect the premium of your zero depreciation addon cover:

Age of your car

Since a zero depreciation addon is directly related to the aging of your car and its parts, the age of your car plays a huge factor in determining the premium for your zero depreciation addon cover. 

Model of your car

In a car insurance, a lot depends on the model and type of your car. Since the cost of its parts too will depend on it. Therefore, the kind of car you have also plays a huge factor in determining the cost of your zero depreciation addon cover.

Location of your car

Every city and the risks it is faced with is different. Therefore, in a car insurance, your premium- including the additional premium of your zero depreciation cover will be dependent on the city you drive your car in.

Why is a Zero Dep Car Insurance better than a standalone Comprehensive Car Insurance Policy?

Difference between Zero Depreciation and Comprehensive Car Insurance

Zero Depreciation Car Insurance

Comprehensive Car Insurance

What is it?

A zero depreciation cover is an optional addon you can opt for in your car insurance policy. Having this addon in your plan ensures your insurer won’t charge for your car’s depreciation during claims and hence, you won’t be liable to pay for the cost of depreciation of your car’s parts during claims.

A comprehensive car insurance policy is a type of car insurance policy that covers for your car’s own damages and third-party damages. This type of policy can further be customized for extensive coverage.

Premium

On opting for this addon, your comprehensive car insurance premium will increase by approximately 15%.

The premium for a standalone comprehensive car insurance policy is lower than that of a comprehensive car insurance policy with addons.

Cost of Depreciation

Having a zero depreciation addon means you don’t need to pay for the cost of depreciation during your car insurance claims.

In a comprehensive car insurance policy, you will be required to pay for the cost of depreciation of your car’s parts during car insurance claims.

Age of the Car

A zero depreciation addon can be opted for all cars that are less than five years old.

A comprehensive car insurance policy can be opted for all cars that are less than fifteen years old.

How much do you save?

While you pay a slightly higher premium, your long term savings are high as you aren’t required to pay for your car’s depreciation costs during claims.

The only saving you have is the extra premium you would save on by not opting for addons.

Role of a Zero Depreciation Cover During Claim Settlement

Things to Remember about Zero Depreciation

Who should opt for a Zero Depreciation Cover?

FAQs about Zero Depreciation Cover in Car Insurance