It is a Good Deal To Buy Zero Depreciation 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.

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.

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.

Read more: How Can Zero Depreciation Cover Be Beneficial During Claims

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.

The simple answer is YES. If you want to save money on repairs, opting for zero depreciation cover in car insurance is a wise choice. Although it increases your premium slightly, the long-term benefits outweigh the cost, as repair expenses can be significantly higher than the additional premium.

Research Before Buying

Before you buy zero depreciation car insurance, compare different insurers and their offerings. Companies like Tata AIG provide this as an add-on to their comprehensive car insurance policies. Always check car insurance quotes online to understand pricing and select the best coverage for your needs.

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.

Read more: 5 Types of Car Insurance Coverage Explained

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 on repair costs and avoid depreciation deductions, you should consider a zero depreciation vehicle insurance plan. It ensures that you receive the full claim amount without depreciation, making it a cost-effective solution in the long run.

Why does zero depreciation car insurance make sense?

A zero depreciation cover in car insurance allows you to get the full claim amount without any deductions due to depreciation. This ensures that you don’t have to pay extra for repairs, making it a great option for new or expensive cars.

Which is the best zero depreciation car insurance or comprehensive insurance?

A comprehensive insurance plan provides overall coverage but deducts depreciation at the time of claim settlement. Adding a zero depreciation vehicle insurance cover ensures that you receive the full repair cost without depreciation cuts. The best option depends on your budget and coverage needs.

How much will a zero depreciation add-on cover cost?

The cost of a zero depreciation cover in car insurance depends on factors like the car’s age, make, and model. Typically, it increases the premium by 15-20% but saves money on future repairs. Always compare insurance providers to find the best rates.