Why should you opt for zero depreciation Car insurance?
A zero depreciation cover provides for the complete coverage of the vehicle without any deductions.
Rahul Jha, who works as a general manager in a Mumbai-based firm got furious with the insurance company when he had to shell out Rs. 18,000 from his pocket towards his car repair.
| Without Zero Depreciation Cover | With Zero Depreciation Cover | |
|---|---|---|
| Total Expense towards car repair | 60000 | 60000 |
| Assumed rate of depreciation | 30% | 30% |
| Amount beared by insurance company | {60,000-(60,000*30%*)} 42000 | 60000 |
| Expense from own pocket | 18000 (60000*30%) | NIL |
Rahul incurred a total expense of Rs. 60,000 towards repairing his car, however the insurance company reimbursed him only Rs. 42,000 after deducting a depreciation of 30%. Had Rahul opted for a zero depreciation policy, he would have easily saved Rs. 18,000.
Who should buy a Zero Depreciation Car Insurance?
- People with luxury cars
- People living in accident prone areas
- If you worry about small bumps and dents
- If you have a car with expensive spare parts
What role does zero depreciation play when you make a claim?
When you make a claim with a basic car insurance policy, the insurance company does not factor in the actual cost and reimburses just the depreciated value of the car parts replaced. A zero depreciation car insurance extends to the repairing costs of fibre, glass, rubber parts and plastic. The premium for a zero depreciation car insurance is slightly higher than the premium of a normal car insurance, but the insured is entitled to a 100% re-imbursement in case he makes a claim.
A zero depreciation car insurance rider can be bought if you have purchased a new vehicle, or for a vehicle not older than three years. So, if your car is more than three years old, you will have to buy a normal car insurance.
In order to ensure that people do not make meaningless claims, a zero depreciation car insurance comes with a restriction on the number of claims that you can make annually. This varies from one insurance company to other.
A zero depreciation car Insurance does not cover few conditions:
-
Wear and tear
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Damage to uninsured items like accessories and bi-fuel/gas kit, tyres
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Damage due to uninsured peril
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Damage due to mechanical breakdown
Opting for a zero depreciation car insurance can save you from burning a big hole in your pocket in case of an accident. It is always wise to buy a zero depreciation car insurance to protect your vehicle from all threats and damages.
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