Imagine having to spend thousands of rupees from your pocket on the repair-bills on a car that has been covered under a ‘comprehensive’ insurance policy. Hurts, no? Well, that’s what many car owners go through every time they make an insurance claim. For instance, on a typical bill of Rs 1,00,000, one might get an insurance compensation of only around Rs 70,000. It gets worse if there’s a higher percentage of plastic panels are involved. This is exactly where a Zero Depreciation car insurance cover comes to the rescue.
Basically, insurance companies factor in the depreciated value of a vehicle to calculate the payable amount at the time of a claim. The difference between the cost of the new part and the value of the old part has to be paid by the car owner. Hence, one ends up shelling a considerable amount on a relatively older vehicle when making an insurance claim. The only way to prevent this is to opt for a zero depreciation car insurance policy.
A zero depreciation cover is commonly known as ‘zero dep policy’. A zero dep policy gives total coverage without calculating the depreciated value. Hence, in an event of claim, your entire repair bill is settled by the insurance company. The only cost that the car owner bears is that of the consumables and parts not falling under insurance cover.
A zero dep cover costs significantly more than a typical comprehensive car insurance policy. This is because a zero dep cover offers total reimbursement of the repair bill without taking into consideration the depreciated value of the parts. No surprise, then, that it’s slightly on the pricier side.
Also, a zero depreciation car insurance policy is available only for new cars. We feel that it makes complete sense as owners of old cars don’t need to spend a lot of money on getting an expensive insurance policy. Also, it has often been seen that owners of older cars prefer leaving small dings and scratches unattended. Even in case of a repair, they often get the job done at a local workshop, where the repair costs are lower. Hence, opting for a pricey cover doesn’t make much sense.
Furthermore, when buying a policy, please make sure to check the number of claims that are allowed in a year. Insurers generally put a limit on the number of claims one can make to prevent car owners from claiming insurance for even small repairs.
In case you just bought a new car, we strongly recommend you to opt for a zero depreciation policy to benefit from maximum reimbursement in case of a claim. Also, many suggest that a zero dep cover should be bought by only those who are relatively inexperienced behind the wheel. We beg to differ here as accidents are often events of misfortune, wherein even the most experienced of the drivers might find themselves involved in a car crash. Hence, it’s best to not take chances and opt for a zero dep cover for your car.