Benefits Of Zero Depreciation Car Insurance Coverage

Depreciation is one such factor that cannot be controlled or eliminated in a car, but there are pragmatic ways to deal with it. Every vehicle is subject to depreciation, no matter how well you take care of your car. But sometimes, if not handled with care, it may cause you expenses that you would rather not bear.

What is depreciation?

In simplified terms, depreciation is the decrease in the value of any asset, and in this case, your car. With regular use, wear, and tear, your car’s monetary value decreases even though its performance is top-notch. Depreciation occurs in many commodities, but in the case of cars, it can cost you high expenses if you have not covered it in your insurance policy.

What is zero depreciation car insurance coverage?

Under a basic insurance policy, if you file a claim in the event of any damage to your car, you are responsible for bearing the depreciation costs of the car parts. But if you have the additional zero depreciation or nil depreciation cover, then your insurance will compensate for the same. This means that if you file a claim under this add-on coverage, the depreciation value of the parts that are being replaced or repaired will not be deducted from your claim amount.

Your comprehensive car insurance offers an extensive cover but it may still miss covering potential damages to your vehicle. Even though depreciation is not categorized as damage in itself, it is a factor considered at every stage of your car’s life span, and it is going to cost you throughout the span of your ownership. You can eliminate that factor with zero depreciation car insurance.

What are the benefits of zero depreciation car insurance coverage?

1.    Under this type of car insurance coverage, at the time of filing the claim, your insurer will compensate you for the entire amount. However, there might be some mandatory expenses that need to be borne by you.

2.    Since you do not have to pay for the depreciation value of your car parts in case of damage or repair, it reduces or even eliminates the financial and mental burden on you.

3.    With zero depreciation car insurance, you get maximum coverage for plastic parts.

4.    The zero depreciation cover increases the strength of your basic car insurance policy.

Who is this cover beneficial for?

●     This cover is ideal for new car owners as it is not valid for cars that are older than five years.

●     If you travel long distances or rigorously use your car, you should opt for this cover.

●     If your car is expensive, you can save a lot of money in the event of a claim as you will not be paying any depreciation costs.

●     This type of car insurance coverage is also ideal for anybody living in accident-prone areas.

Here are a few things to note before buying zero dep insurance coverage

●     Your premium cost is bound to be more than a basic comprehensive car insurance plan.

●     The premium amount for zero depreciation car insurance is determined by the age, model, and engine of your vehicle, as well as your location.

●     Before buying your car insurance plan, you can check with your insurer about the inclusions and exclusions under this plan as it may differ from one company to another.

●     You can apply for a claim under this cover only twice during the entire tenure of your policy.

A zero depreciation car insurance policy might only be for a limited time period, but as long as you have it, you are safe from incurring huge expenses. Even as your car gets older, it deserves the best care without costing you a fortune, and that can be achieved with the add-on coverage of zero depreciation.

For more information, visit the Kotak General Insurance website