Zero Depreciation Car Insurance

Zero Dep Car Insurance - A zero depreciation add-on cover, also known as Nil Depreciation and Bumper-to-Bumper cover, is a popular car insurance add-on cover which is most commonly opted by car owners along with their comprehensive car insurance policy. It shifts the liability of bearing the depreciation of your car and its parts from you to the insurance company against a nominal premium. Sometimes, even a single claim helps you recover the entire zero depreciation cover’s premium amount.

A zero depreciation add-on covers all parts of your car at 100% except tyres, tubes and batteries which are covered at 50%. Generally, insurers allow 2 zero depreciation claims during the policy tenure, however, there are some insurers like IFFCO Tokio who allow you to make an unlimited number of zero depreciation claims during the tenure of your car insurance policy.

Who Should Opt for a Zero Depreciation Cover Add-on?

Here is the list of types of people who should buy the zero depreciation cover:

1. New Car Owners – New car owners who have purchased a new car should opt for this cover as depreciation starts since the car is sold. Hence, if a new car gets damaged, one might not get a good amount of claim without this add-on cover.

2. People who have Luxury Cars that have Expensive Parts – If you own a luxury car and it gets hurt due to an accident, it clears that you will have to spend a huge amount on its repair. Hence, a complete amount of claim can only help you to get your car repaired easily.

3. People Living in Accident-Prone Areas – People who reside in accident-prone areas are more likely to get indulged in accidents. Therefore, in order to receive a relevant amount of claim to get their cars repaired they should pick the zero-depreciation cover.

4. New Drivers - People who have just begun to drive a car or a new driver could take a little more time to become an expert and are more likely to get involved in a collision. Hence, this add-on cover is a must for such people.

5. Regular Car Users – Since accidents can bring any amount of damage, hence, it may not be easy for even old car owners to bear the cost of repair. Hence, if your car is eligible to be covered with the zero depreciation plan, you should opt for it.

Benefits of Zero Depreciation Car Insurance Cover

The benefits of zero depreciation car insurance cover are mentioned below:

1. Enhances Coverage: A zero depreciation add-on cover is not just beneficial for amateur drivers but also for experienced drivers. It offers additional protection to the policyholder from financial crises arising due to damages or losses to the car in an accident or mishap. Also, this cover reduces the expenses of policyholders to almost zero.

2. Repair Cost Considered Without Depreciated Value: Cost arising out of replacement or repair of car’s insured parts are resolved without taking into account the depreciated value.

3. Curbs Additional Expenses: Expenses arising out-of-pocket are limited as the cost of depreciation is not considered while going for claim settlement.

4. Save Money in the Long Run: With a zero depreciation cover, the premium amount becomes higher. However, in case of a mishap, the claim amount will not take into account the depreciation of the car hence giving you a higher compensation. This compensation amount is usually much higher than the premium paid for the add-on and

5. Greater Compensation: The limit of the claim you can receive is determined by the policy’s IDV. This is directly affected by the depreciation rate. Hence, with the zero depreciation add-on cover, you can make claims that do not take into account the depreciation rate of the car and receive a higher claim amount.

6. Greater Peace of Mind: Car insurance provides a layer of protection for the car owner and the car by compensating for losses and peace of mind. This is further strengthened by a zero-depreciation add-on cover as it negated the depreciation rate of the car.

What is Covered and Not Covered under Zero Dep Car Insurance?

A zero depreciation car insurance can be availed under the following circumstances:

• Damage to car due to accidents/theft.

• Damage to the car due to a natural calamity.
• Damages due to vandalism, transit during transportation and riots.

One cannot avail zero depreciation for:

• Total loss of the vehicle with repairs amounting to more than the IDV (Insured Declared Value) of the vehicle.
• Accidents where the driver was driving without valid documentation.
• Driving under the influence of prohibited substances.
• Mechanical or engine breakdown.
• Regular wear and tear.

How does Zero Dep in Car Insurance Work?

Zero depreciation add-on allows beneficiaries to avail complete compensation on vehicle repair, sans depreciation. A zero depreciation cover is useful when your car needs minor repair work – like expired/damaged spare parts. In scenarios like damage to the car due to a fire or vandalism, the depreciated value of the vehicle’s spare parts will not be considered when you own a zero depreciation add-on, especially for those who only own a third-party car insurance.

Zero Depreciation Car Insurance Vs Comprehensive Coverage

The difference between zero depreciation cover and comprehensive cover can be understood with the help of the table below:

Following is the impact of zero depreciation/nil depreciation/bumper to bumper insurance.

Disclaimer: Battery / Plastic / Nylon / Rubber parts -> 50% covered; Fiberglass -> 70% covered, Wooden & Metallic parts -> Depreciated basis age of vehicle (normal)

How is Zero Depreciation Car Insurance Premium Determined?

Zero-dep car insurance premium can be determined through the following ways:

1. Car’s Age and Model:

The age and model of your car significantly impact the premium. Newer and high-end models usually have higher premiums due to the higher cost of their parts and repairs.

2. Insurance Provider:

Different insurance providers have different methods of calculating premiums. It’s advisable to compare quotes from various insurers to get a good deal.

3. Location:

Your geographical location plays a part too. Areas prone to accidents or thefts might have higher premiums.

4. Claim History:

Your claim history can also influence the premium. A clean claim history may lead to a lower premium.

5. Add-On Covers:

If you opt for additional covers along with the zero depreciation cover, the premium will increase accordingly.

6. Frequency of Policy Purchase:

Some insurers increase the premium if you opt for zero depreciation cover consecutively in policy renewals.

7. IDV (Insured Declared Value):

The IDV of your car is the maximum amount you can claim under the policy. Higher IDV can lead to a higher premium.

8. Policy Terms and Conditions:

The terms and conditions of the policy, including the coverage, exclusions, and add-ons, also play a part in determining the premium.

9. Engine Capacity and Type:

• Cars with higher engine capacity may have higher premiums as the repair costs for such vehicles are usually higher.
• Understanding these factors will help you get a clearer picture of how your Zero Depreciation Car Insurance premium is calculated.

How to Buy Zero Depreciation Car Insurance from InsuranceDekho

Step 1: Visit the InsuranceDekho homepage.

Step 2: Hover your cursor above ‘Insurance’ and select ‘Car Insurance’.

Step 3: In the subsequent drop-down list, select ‘Zero Depreciation’.

Step 4: Once you click on ‘Zero Depreciation’, a page will display the list of Zero Depreciation plans from prominent insurance providers.

Step 5: Click on any one of the insurance plans and select ‘Check Prices’.

Step 6: Enter your car’s registration number as indicated in the below image and choose an insurer according to your preferences.

How to Renew Zero Depreciation Car Insurance?

Renewing your Zero Dep car insurance is crucial to ensure continuous coverage and peace of mind while on the road. Here’s a simplified guide to help you through the renewal process:

1. Review Current Policy:

- Before renewal, review your current policy to understand the coverage, benefits, and any exclusions. Assess if the policy still meets your needs or if you require additional coverage.

2. Check Renewal Reminder:

- Usually, insurance companies send out renewal reminders via email or SMS. Keep an eye out for these reminders which may also contain instructions for renewal.

3. Online Renewal:

- Visit the insurer’s website or use their mobile app for renewal. Log in with your credentials and navigate to the renewal section.

4. Update Information:

- Update any changed information such as address, contact number, or any other relevant details. It’s important to keep your information current to avoid any issues during a claim.

5. Compare Other Offers:

- It’s wise to compare other offers available in the market. Use online comparison tools to compare premiums and coverage offered by different insurers.

6. Consider Additional Coverage:

- If needed, opt for additional coverage or add-ons like roadside assistance, engine protection, etc., to enhance your policy.

7. Check Discounts:

- Look for discounts or offers that may be available during renewal. Some insurers offer discounts for a good driving record or for installing safety devices in your car.

8. Make Payment:

- Once satisfied, proceed to make the payment for renewal through a secure online payment gateway.

9. Review New Policy Document:

- After payment, you will receive a new policy document via email. Review it to ensure all details are correct and the coverage is as per your requirements.

10. Download and Print:

- Download a copy of the new policy document for your records. Keep a digital copy on your phone and a printed copy in your car.

11. Consult an Advisor if Necessary:

- If you have any doubts or find the process confusing, consider consulting with an insurance advisor who can guide you through the renewal process.

The process of renewing Zero Depth Car Insurance is now more streamlined thanks to online platforms provided by insurance companies. Ensuring a timely renewal will help you maintain uninterrupted coverage and drive with peace of mind.

What is the Cost of A Zero Depreciation Cover? What Makes it Worth the Price?

In most cases, the zero depreciation cover costs approximately 15%of the insurance premium. Though it may seem like a steep price for an add-on cover, it is worth the cost as the compensation amount will prove to be significantly higher than the premium. A zero dep car insurance calculator can help you estimate the cost of a zero dep cover.

Claim Settlement with Zero Dep Car Insurance

To benefit from a zero depreciation cover, mention your zero depreciation cover details to your insurer while registering your claim. This will be factored in the final step of the claim settlement process, despite the type of claim settlement you opt for (cashless or reimbursement).

Things to Keep in Mind About the Zero Depreciation Add-on Cover?

These are a few things to keep in mind when purchasing zero depreciation car insurance:

• This add-on is available only for cars that are less than five years old.
• The Zero-Depreciation Cover does not deduct the compulsory deductibles of the policy.
• There is a limited number of Zero depreciation claims within a year.
• Zero Depreciation cover and the bumper to bumper cover offer the same coverage.