Zero depreciation, a car insurance addition that covers the amount of the claim without taking into account the depreciation of various parts of your car, is an insurance cover that increases the amount of the policyholder’s claim. You can only use it for a specific amount of time during a policy term.
What does Depreciation mean?
Your car, like all commodities, is subject to depreciation. This refers to the time-dependent devaluation of your vehicle due to wear and tear. The car owner is responsible for the depreciation liability and not the insurer. At the time of a claim settlement, the depreciation amount applicable to your car and its components are deducted from the compensation amount, thereby reducing it. The Zero Depreciation Add-On Cover is a great option.
What is Nil/Zero Car Insurance?
Zero Dep Car Insurance is a very popular add-on coverage that covers car owners. Also known as Bumper bumper and Nil Depreciation, it is the most common car insurance cover. This insurance policy shifts your liability to pay the depreciation on your car and any parts to the insurance company for a nominal premium. Sometimes, a single claim can help you recover the premium amount for zero depreciation coverage.
The zero depreciation option covers your entire car at 100%, except for tires and tubes which are covered at 50%. Insurers generally allow two zero-depreciation claims per policy. However, some insurers, such as IFFCO Tokio, allow unlimited zero depreciation cases during your car insurance policy.
Who should choose a zero depreciation cover add-on?
Below is a list of individuals who should purchase the zero depreciation coverage:
1. New Car Owners– All new car owners should choose this coverage as the car’s depreciation begins from the time it is sold. This add-on covers you in the event that your car is damaged.
2. Luxury Cars with Expensive Parts If your car is in an accident, you’ll have to pay a lot of money to repair it. A complete claim will only allow you to have your car fixed quickly.
3. Residents in Accident-Prone Zones – Accident-prone residents are more likely than others to be in an accident. To ensure that they get the right amount of compensation to have their car repaired, they need to choose zero-depreciation coverage.
4. New Drivers People who are just learning to drive a car, or new drivers, may take longer to become proficient and are more likely to be in an accident. This is why this add-on coverage is so important.
5. Regular Car Owner – Accidents can cause any kind of damage. It may be difficult for elderly car owners to pay the repair costs. If your car qualifies for the zero depreciation plan you should choose it.
Car insurance coverage that is zero depreciation
Below are the benefits of car insurance that don’t depreciate.
1. Increases coverage: The zero depreciation option cover isn’t just for experienced drivers, but it also benefits amateur drivers. This add-on provides additional protection for policyholders against financial crises that may arise from damages to or losses to their car due to an accident or mishap. This cover also reduces policyholders’ expenses to nearly zero
2. Repair Costs Considered without Depreciated Valuation: The cost of replacing or repairing the car’s insured parts is not taken into consideration.
3. Curbs Additional Costs: These expenses are not out-of-pocket as depreciation costs cannot be considered when a claim is being settled.
4. You save money in the long term: A zero depreciation policy will increase your premium. In the event of an accident, the claim amount won’t take into consideration the depreciation of your car, so you will receive higher compensation. The compensation amount is often much greater than the premium for the add-on.
5. Greater Compensation: Your IDV determines the limit on the amount of compensation you are entitled to. The depreciation rate directly affects this. With the zero-depreciation add-on cover, you can claim that does not take into consideration the depreciation of your car and get a higher amount.
6. Greater peace of mind: Car insurance offers added protection to the car owner and car, compensating for losses and providing peace of mind. The zero-depreciation option cover negates the car’s depreciation rate.