It is a Good Deal To Buy Zero Depreciation Insurance
Similar to how humans start ageing the day they are born, a car’s value also starts depreciating the day it leaves the showroom and enters the roads. Heat, snow, rain, constant use, accidents, etc., impact a car’s value. When you buy car insurance online, the premiums are charged on the basis of its current value.
It is a Good Deal to Buy Zero Depreciation Insurance
With time, the insurer takes into account the rate of depreciation of the car and settles your claims as per the depreciated value of the vehicle. This can be a loss for you.
However, a zero depreciation cover along with your basic car insurance plan can help you. Read on to know how.
What is Depreciation in Car Insurance?
Depreciation refers to the reduced value of your car. With time and regular use, your car can lose its lustre. Metal parts start eroding, plastic parts can break off, and the internal machinery of the car can be negatively impacted. All of these factors decrease your car’s overall performance and ultimately lower its worth. This, in turn, affects its resale value, insurance value, and repair value.
What is a Zero Depreciation Cover in Car Insurance?
A Zero Depreciation Cover or Bumper-to-Bumper Cover or NIL Depreciation Cover is an additional rider that can be bought with the insurance for your car at an extra cost over and above the basic premiums. The greatest benefit of Zero Depreciation Cover is, you can claim complete car insurance coverage. This way, you do not lose out money at the time of claim settlement. And the complete cost of repairs can be covered with the insurance payout.
How does Zero Depreciation Cover Help During Car Insurance Claims?
Since the Zero Depreciation Cover keeps the value of your car preserved to its original cost, you can claim the entire price of repairs when making a claim. The simplest way to explain this is with the help of the following example: Suppose you incur damages to your car and file for a damage claim of ₹20,000 with your insurance provider. When the insurer processes the claim, they will consider the depreciated value of all the parts to be replaced/repaired. Considering the calculated depreciation on your car comes out to be 20%, you will only be paid out ₹16,000 as claim settlement. You will have to bear ₹4000 from your own pockets.
Now, in the same damage claim, let us assume that you have a Zero Depreciation Cover in your car insurance policy. The insurance company, in this case, will not consider the depreciation of the value. As a result, the claim settlement paid out will be equal to the original claim, i.e., ₹20,000.
Thus, the Zero Depreciation Cover will offer you a higher settlement. Even after paying an extra charge for the rider, you will still end up saving more money in the long run by saving on repair expenses.
When is it Ideal to Purchase Zero Depreciation Car Insurance in India?
You should buy a Zero Depreciation Cover as soon as you buy insurance for a new or used car. This way, you can preserve the real value of your car. If you have not bought a cover yet, you can consider buying it at the time of car policy renewal too.
Other times when a Zero Depreciation car insurance is necessary is if you own a luxury car. Such cars can require more maintenance and care than usual cars and hence depreciate faster. City drivers may also need a Zero Depreciation Cover as driving in crowded cities can lead to dents and small accidents.
If you are a first-time car owner and lack confidence in driving, a Zero Depreciation Cover can help you in times of claims in case of accidents or dents.
Do you need a Zero Depreciation Cover?
The simple answer is YES.
If you want to save money on repairs, you will require a Zero Depreciation Cover. A lot of people get deterred by the extra cost of purchasing the cover. However, the cost of repairs can be a lot more than paying nominally extra premiums. Therefore, you must consider adding a Zero Depreciation Cover to your car insurance to gain long term profits.
Research well and determine your requirement
It helps to research well before picking a car insurance plan and Zero Depreciation Cover for your car. TATA AIG car insurance offers a Zero Depreciation Cover as a rider. You can add this to your plan and enjoy full coverage of your car. The website offers car insurance quotes online that you can consult to get an idea of the premium.
What is the verdict?
A Zero Depreciation Cover is undoubtedly a great addition to your motor insurance plan. Therefore, you must remember to add one when you buy car insurance online, regardless of the type of car you own. TATA AIG car insurance offers a Zero Depreciation Cover along with several other add-ons and features that can benefit you.
Questions to revise the blog at a glance.
What is the benefit of zero depreciation car insurance?
A Zero Depreciation Cover offers full coverage on repairs without factoring in any depreciation. Hence, your out-of-pocket expenses are reduced, and you can rely on the insurance payout for all expenditure.
Should I take zero depreciation car insurance?
Yes, if you want to save money in the long run, you must consider purchasing a Zero Depreciation car insurance cover. Such plans reduce your expenses spent on costly repairs and offer value for your money.
Why does zero depreciation car insurance make sense?
A Zero Depreciation car insurance policy lets you claim the full car insurance coverage value without factoring in any depreciation. As a result, you get more money at the time of claim settlement, and you do not have to spend your own money to have your car fixed.
Which is the best zero depreciation car insurance or comprehensive insurance?
The choice between the two can differ as per your car’s requirements and your budgetary limitations. It may be advised to buy a comprehensive car insurance plan and add a Zero Depreciation Cover to it for enhanced protection. This can be a cost-effective option.