What Will the Zero Depreciation Cover?
When you buy zero-depreciation car insurance online, check what it covers. Usually, the cost of repairs and replacements for the damaged parts is a key factor. These costs are also covered under specific situations, such as the following:
1. Natural or Man-made Disasters:
If your car is damaged due to a natural calamity, such as a flood or landslide, the car insurance company will consider the zero-dep add-on. It will also come into effect in the event of damage caused by vandalism, riots, or terrorist attacks.
2. Accidental Damages:
Accidental damages are the most common cause of damage to your car. Zero depreciation will provide coverage for damage from collisions or other road accidents.
3. In-transit Damages:
If your car is damaged during transit, the zero depreciation cover will provide benefits.
In such cases, you could also consider the Return-to-Invoice cover.
Benefits of Zero Depreciation cover:
Even for cars driven less than 5,000 km a year, the risk remains. After all, the advantages that you have are the same, considering the risk of accidents.
Here are some of the key reasons why you should get this cover even if you drive your vehicle less:
1. Full Claim Settlement
The insurance company will offer you a full settlement for the damage, without factoring in depreciation. Whether it's headlight damage or bumper damage, the zero depreciation add-on will cover it all.
2. Increased Coverage
Adding zero depreciation to a comprehensive insurance policy enhances its coverage. It covers the additional cost for parts such as plastic, fibreglass, and rubber. Therefore, if there is damage, you can get the repairs without paying extra. However, make sure to understand the difference between zero depreciation and comprehensive insurance.
Read More: Difference Between Comprehensive and Zero Depreciation Insurance
Are There Any Limitations of Zero Depreciation?
The benefits of zero depreciation cover are endless. However, for some who drive their car very rarely and in less risky areas, there are certain limitations too. The most common ones include:
1. If your car isn't at risk of accidents, getting zero-depreciation insurance may not be worth it.
2. There are some exclusions to the policy in terms of specific parts.
3. The coverage under this add-on can vary significantly.
4. Extremely old vehicles may not be eligible for the cover.
What happens if I make a claim under zero depreciation even though the car is driven less than 5000 km annually?
If you file a claim for damaged parts such as metal panels, trims, and so on, the insurer will not deduct the amount. Under the standard insurance policy, you would have had to pay a significant claim amount.
However, without depreciation cover, you will incur full costs for the approved replacements. You don't have to go for any out-of-the-pocket investments, except for exclusions and deductibles.
For older vehicles over 5 years old, is zero depreciation applicable?
The vehicle's age determines whether zero depreciation applies. In most cases, zero depreciation applies to cars older than 5 years. Zero-depreciation car insurance eliminates depreciation deductions for replaced parts. However, compulsory and voluntary deductibles still apply as per policy terms.
Expert Note
This information is based on standard motor insurance guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) and commonly followed industry practices. Policy coverage and conditions may vary by insurer.
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