In the context of motor insurance policy, depreciation refers to the decrease in the value of an asset over time due to variables such as age, wear and tear, and obsolescence. Vehicles, in general, depreciate with time. A new car, for example, will cost more than an older one. Similarly, all the materials that make up the car, such as glass, plastic, and metal, have a depreciation factor. Each material or component depreciates at a different rate.
A comprehensive car insurance policy with zero depreciation add-on cover is known as a zero-depreciation car insurance policy. This means that throughout vehicle insurance claims, your car will be free of general depreciation. All insurers will account for depreciation on your car's parts without zero depreciation coverage and will only pay your claim once depreciation has been deducted. There is no depreciation with the add-on, so you get more money during claims.
If you have recently purchased a car or have a vehicle that is still relatively new, a zero-depreciation car insurance coverage makes sense. Alternatively, for the following reasons: Owners of high-end automobiles• New drivers are needed.
|Claim Amount||Covers total loss or damage without
deducting the depreciation
|Age of the car||Up to 5 years|
|Own Expense/td>||Less burden on the policyholder at the time of claim|
|Cost of Plastic Parts and Repair||Maximum Coverage|
Here is the list of benefits which are covered under Zero Dep Insurance:• A zero-depreciation add-on cover is beneficial to both novice and experienced drivers. It provides the policyholder with additional protection against financial crises caused by vehicle damage or loss in the event of an accident or mishap. Furthermore, this coverage reduces policyholders' expenses to almost zero.
You can be confident that with this cover, you will have complete peace of mind. Furthermore, because all major insurers provide this coverage, you can save a lot of time and money by paying a little extra for a nil-depreciation policy.
Several companies provide zero depreciation insurance plans. Bajaj Finance offers policies that cover zero depreciation, engine protection, NCB protection, accident coverage for car passengers, key replacement compensation, consumables covers and many other benefits.