Why should you opt for zero depreciation Car insurance?

Nutan Gupta

09 Nov 2016

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

  • Damage to uninsured items like accessories and bi-fuel/gas kit, tyres

  • Damage due to uninsured peril

  • 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.

Buy Car Insurance Now!

Similar articles

  • Responses
  • Patidar Samaj

    - 2 hrs ago

    This article claims RJio was given a "Backdoor Entry" into the 4G Based Voice Routing. The peculiar aspect is without the Voice License, Rjio would have been a mere ISP. With the license, it is now a holistic communications service provider, with ability to exponentially scale the bouquet of products. The events indicate it was meticulously planned way before the auctions because the auctions were clear on the agenda: 4G for internet only.

Load More
mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


Banner

Why should you opt for zero depreciation Car insurance?

Nutan Gupta

09 Nov 2016

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

  • Damage to uninsured items like accessories and bi-fuel/gas kit, tyres

  • Damage due to uninsured peril

  • 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.

Buy Car Insurance Now!