Zero Depreciation Car Insurance

Zero Depreciation is a car insurance add-on cover that negates the impact of depreciation in your car insurance policy. Usually, if your car gets damaged, the car insurance claim amount that you can receive accounts for the depreciation accumulated on the car due to age and usage.

However, with a Zero Depreciation Cover, you can receive the entire value of your car's components during a car insurance claim without any deductions for depreciation. Therefore, adding a Zero Depreciation Cover enhances the coverage of your car insurance plan and increases the financial protection for your vehicle.

In a Zero Depreciation Cover, Zero Depreciation means that there is no effect of depreciation on your car insurance plan. Therefore, buying Zero Depreciation Car Insurance is a beneficial decision. Out of the car insurance companies in India selling zero depreciation car insurance in India, Tata AIG is an excellent choice, particularly with our long history of high-quality customer service delivery.

Depreciation is the reduction in the value of an asset. In the context of car insurance, depreciation is the consistent decline in the value of your car's components as a result of age, usage, normal wear and tear, etc. Therefore, the depreciation accumulated on your car is directly proportional to its age.

The depreciation rate for all vehicles in India is decided by the norms determined and released by the Insurance Regulatory and Development Authority of India (IRDAI). Here is a table displaying the depreciation that gets accumulated on your car every year.

Rate of depreciation for all other parts including wooden parts is to be as per the following schedule:

If you have a Zero Depreciation Cover, you can claim the entire amount of the damaged components of your car in your car insurance claim, which essentially means that there is zero depreciation or nil depreciation in your car, at least as far as its insurance plan is concerned.

If you wish to have complete insurance coverage for your car, you must opt for zero depreciation car insurance. Whether you are a new car owner, a veteran car owner, or a sports car enthusiast, adding a zero depreciation cover to your car insurance plan can spare you from having to bear the burden of the depreciation of the car's parts, particularly in the form of a reduced car insurance claim payout.

Here is the list of people who should opt for Zero Depreciation Car Insurance.

1. New Car Owners: If you have recently purchased a new car and are considering different car insurance policies for it, you must add a zero depreciation add-on cover to the plan you select. By doing so, you can get extensive insurance coverage for your car.

2. Sports Car Owners: Owning a sports car comes with a fair amount of thrill and pride. However, since the prices of such cars are high, their components are costly too and often difficult to repair and/or replace. Therefore, it is advisable for sports car owners to buy zero depreciation car insurance.

3. Luxury Car Owners: If you own a luxury car, the cost of repair of its components could leave your pockets considerably lighter, even with a good car insurance plan. This is why you must not think twice before opting for a zero depreciation cover for your luxury car.

There are several benefits of a Zero Depreciation Car Insurance Add-on Cover:

1. Increase in Coverage: Adding a zero depreciation cover to your car insurance plan leads to an enhancement in the overall coverage you have for your precious four-wheeler. This way, you do not need to worry about the high cost of the repairs of various car parts and the reduction of your car insurance claim amount.

2. Higher Car Insurance Claim Amount: By adding a zero depreciation car cover to your car insurance policy, you can claim the total repair/replacement cost of the various insured parts of your car. And since the amount of depreciation will not weigh the amount of claim down, you benefit from a higher car insurance claim amount.

3. Lower Out-of-pocket Expenses: Even if you have a comprehensive car insurance plan, the amount of car insurance claim that you receive may not be sufficient to meet the expenses incurred in the repair or replacement of the car's components. This is because of the depreciation accumulated on your car reducing its Insured Declared Value and, in turn, the claim amount. However, with a zero depreciation cover, you do not have to worry about the depreciation of your car's components.

4. Nominal Additional Cost: A Zero Depreciation Cover adds only a nominal additional cost to your car insurance plan but adds substantial benefits to your car insurance coverage.

5. Peace of Mind: The knowledge that your car is completely financially secure against any damages, including depreciation, can enable you to have peace of mind with regard to your driving companion. And you can attain that knowledge by buying a zero depreciation car insurance cover.

Zero depreciation in car insurance significantly reduces out-of-pocket expenses for you by eliminating depreciation deductions during claims settlement. For example, in a scenario where a car’s bumper is damaged, the difference in claim settlement between a policy with and without zero depreciation add-on is substantial.

Without zero depreciation coverage, the claim amount is significantly reduced due to depreciation deductions. On the other hand, with zero depreciation add-on, your out-of-pocket expenses are considerably lower.

Here you would only need to pay the standard deductible while avoiding deductions for depreciation. As a result, the claim amount will be higher and your financial burden will be significantly reduced.

If you are wondering how the depreciation on the various parts of your car is calculated, the following table can answer your queries:

Rate of depreciation for all other parts including wooden parts is to be as per the following schedule:

If you do not have a zero depreciation cover, your car insurance claim amount will be determined after the deduction of the depreciation accumulated on your car's components. This could mean that a significant proportion of the repair/replacement expenses may have to be borne by you.

Therefore, it is advisable to opt for a zero depreciation add-on with your car insurance policy. You can add the zero depreciation add-on to your Tata AIG car insurance policy online and calculate the premium amount using our car insurance premium calculator. Having a comprehensive car insurance policy and a zero dep cover means extensive financial protection for your car.

Before opting for a zero depreciation cover for your car, you must keep certain important factors in mind.

1. The age of your car: You can buy a zero depreciation cover for your car only if it is not older than five years. Therefore, if you have a car that is more than five years old, you cannot get zero depreciation car insurance for it.

2. The cost of zero depreciation car insurance: Since a zero depreciation insurance cover adds to the layers of protection available to your car, it carries a certain additional cost. This cost, in turn, increases your total car insurance premium.

3. The coverage of zero depreciation insurance: Zero Depreciation Car Insurance does not entail zero depreciation for all the car compo. Some parts are excluded from the coverage of this add-on, including the parts made from glass. Furthermore, the damage to some other car parts is not calculated by 100 per cent deduction of depreciation but certain specified percentages instead. Therefore, you must check the coverage of a zero depreciation cover before buying it.

4. The limit on the number of claims: There is a ceiling on the number of claims you can file against your zero depreciation car insurance cover. You can file a maximum of two claims against this cover across the tenure of your car insurance policy.

It is important to know what is not covered under your zero depreciation cover. Here are the major exclusions from your zero depreciation car insurance policy:

1. Damages to your car whilst caused by driving under the influence: If your car gets damaged as a result of driving under the influence of narcotics or alcohol, any car insurance claim filed to recover the cost of the required repairs is not valid. This is because driving under the influence is not covered by any car insurance plan.

2. The claims following the second claim in the policy term: The zero depreciation cover in your car insurance policy is only valid for the first two claims filed during the tenure of said plan. Any subsequent claims filed against this cover shall not be valid, at least as far as the Zero depreciation aspect is concerned.

3. Damages sustained by your car due to a use not intended for it: If a car intended for private use is damaged whilst being used for a commercial purpose, any car insurance claims filed for said damages are not valid. And this applies to your zero depreciation cover as well.

You must check the policy wordings of your zero depreciation cover to have clarity on the full list of inclusions and exclusions in the plan.

When searching for the best zero depreciation car insurance, purchasing a zero depreciation cover online offers a seamless process. Here’s how you can easily buy zero depreciation car insurance online:

Step 1: Navigate to the car insurance page on Tata AIG’s website.

Step 2: Enter your car details including the model, make and registration year.

Step 3: Select car insurance from the options, focusing on those offering a zero depreciation cover.

Step 4: Choose the desired zero depreciation add-on from the add-ons available.

Step 5: Complete the purchase by paying the final premium amount.

Step 6: Receive your zero depreciation car insurance policy documents via email.

The process of car insurance renewal online zero depreciation is just as straightforward as buying one. However, it is important to keep track of the renewal date to ensure a timely renewal. Here are the steps to follow for a car insurance renewal online:

Step 1: Navigate to the car insurance page on Tata AIG’s website.

Step 2: You will get a choice between new or renewal options.

Step 3: Select the renewal option.

Step 4: Enter all required details.

Step 7: Complete the purchase by paying the final premium amount.

Step 8: Receive an acknowledgement via email.

During claim settlement, standard car insurance policies usually apply depreciation percentages to various car parts, as specified in the policy wording. For instance, nylon, plastic, and rubber parts, including batteries, may incur a 50% depreciation charge. Meanwhile, fibreglass components may face a 30% deduction and wooden parts 5-10% depreciation. However, opting for zero-depreciation car insurance eliminates these deductions entirely.

With zero depreciation coverage, you are not required to pay any depreciation-related costs during claim settlement. Consequently, you receive the full claim amount without deductions for depreciation sustained by your car parts.

This is in stark contrast to standard car insurance plans where you have reimbursed losses after the deduction of depreciation values from replaced parts.

Zero depreciation offers peace of mind by ensuring you receive maximum compensation for repairs or replacements without any depreciation deductions. This comprehensive coverage is especially beneficial if you are a new vehicle owner or drive in a way that your vehicle is more susceptible to damage.

Several factors have a bearing on your zero depreciation car insurance premium, including:

1. How old your car is: The vehicle depreciation rate is directly proportional to the vehicle's age. This is why the age of your car has a significant bearing on the amount of depreciation accumulated on it, which, in turn, helps determine how much premium you need to shell out for your zero depreciation cover.

2. What the make and model of your car are: The make and model of your car are instrumental in the determination of its Insured Declared Value. The higher the IDV of your car, the higher is your car insurance premium and the premium of your zero depreciation car insurance cover.

3. Where you drive the car: The geographical location where you usually drive your car is an important factor in the calculation of your car insurance premium. If you live in a place with a low incidence of traffic, your car insurance premium and the premium for your zero depreciation cover are likely to be lower than for someone who lives in a high-traffic area.

There are several differences between a comprehensive car insurance plan and a zero depreciation car insurance cover. The table below offers a succinct summary of these differences.

By selecting our Comprehensive Car Insurance Policy and adding a Zero Depreciation Cover to it, you can secure extensive financial protection for your car.

If you are still on the fence about opting for a zero depreciation cover, the following reasons may convince you:

1. It Provides Your Car With Higher Insurance Coverage: By choosing a zero depreciation cover, you can get a high degree of protection for your car. If you opt for a comprehensive car insurance policy, you can benefit from extensive coverage. However, the car insurance claim amount that you will get will have a deduction for depreciation. Therefore, you must compliment your comprehensive car insurance policy with a zero depreciation car insurance cover.

2. It Nullifies The Effect Of Depreciation On Your Car Insurance Claim: If you select a zero depreciation or nil depreciation cover, you effectively nullify the effect of depreciation on your car insurance policy and claims. This way, you can claim the entire amount of the repair/replacement expenses for the damages caused to your car without any deductions for the accumulated depreciation.

3. It Reduces Your Total Expenditure For Car Repairs: The cost of repairing or replacing the components of your car can be quite high. Since your car insurance partner will only provide the claim amount after accounting for depreciation, you may have to bear a substantial part of the expenses from your own pockets. Therefore, it is advisable to opt for zero depreciation car insurance.