Why opt for less, when you have an option to get more! After an accident, wouldn’t it feel better to know that your insurer can take care of the complete cost of replacing damaged parts in your car, instead of you having to make a part payment for the same and that too a substantial one. Well, the answer to attain this satisfaction and assurance is only through buying a zero depreciation cover with your motor insurance plan!
To understand how it works, let us understand what we mean by a zero depreciation add–on cover. For an uninitiated, zero depreciation is an additional benefit that every car owner can enjoy at the cost of paying an extra/higher premium. Zero depreciation is usually not included in the standard/comprehensive policy. It is generally available as an add-on cover for the customers to choose. At the time of motor claims, every insurance company always calculates and applies the depreciation rate to decide the amount payable for the damaged parts of the car for settling the claim. The difference in cost between the market price of the new parts and depreciated part needs to be borne by the insured (typically the car owner). The depreciation rates of parts are as follows:
*50 per cent for parts which have high wear and tear like as plastic/rubber parts of the car, battery, tyres/tubes etc.
*30 per cent for fibre glass parts
*0-50 per cent for metallic parts, depending on the age of the vehicle
If you take a bumper-to–bumper zero depreciation policy, you get a protection from this depreciation logic. You can avail full claim without being penalized for the depreciation on the value of the replaced parts. Let us throw some light on this add–on cover and understand why it is a must for your car:
*100 per cent assurance of being insured from the damage a car might face from an accident
*A comprehensive car insurance policy doesn’t account for damages incurred to glass, plastic, nylon, fibre, etc. or any parts of the vehicle, but zero depreciation takes them in to consideration as well
*Hassle free claim settlement without the insured shelling out any money on the repair of the car
*For luxury car owners and people who have expensive spare parts fitted, this add-on cover is a must .
*In the case of zero depreciation cover, the market value and the depreciated value of the damaged parts bear no hindrance or does not affect your pocket in any way as the insurer is the one who has to bear all the expenses
*If you stay in accident prone zone or still new at driving, this is again the best way to secure your car from the unforeseen occurrences
Few things to be kept in mind about a zero depreciation policy before purchasing one:
*The premium of a Zero depreciation policy is wee bit higher than the normal comprehensive policy depending on the car’s age, model and location
*This add on is more suited for new cars ranging between the age group of 1-5 years. The coverage is mostly offered for cars of this age limitation
*This cover is ideal for high-end cars and cars fitted with valuable parts
*Zero depreciation claim has a limit on number of claims taken per year per policy
Insuring smart is much better than insuring cheap!
The author Neeraj Gupta is Head of Motor Insurance, PolicyBazaar.com