It is important to have car insurance if you want to drive a vehicle on Indian Roads and according to Motor Vehicles Act 1988, you can even be fined if you do not have insurance. Depreciation is a reduction in the value of assets due to the usage of the car. The parts of the car undergo wear and tear when they are used and with time the company will deduct the cost of depreciation, or wear and tear, and then pay the claim. Naturally, this drastically reduces the claim amount and you need to opt for a comprehensive policy that will prevent this reduction in the claim.

Zero depreciation in car insurance–

Zero depreciation in car insurance.

Zero depreciation cover provides for the complete coverage of the vehicle without any deductions. Zero depreciation is an add-on to your regular car insurance.

When you make a claim with a basic car insurance policy, the insurance company does not factor in the actual cost and reimburses just the depreciated value of the car parts replaced.

A zero depreciation car insurance extends to the repairing costs of fiber, glass, rubber parts, and plastic. The premium for zero depreciation car insurance is slightly higher than the premium of normal car insurance, but the insured is entitled to a 100% reimbursement in case he makes a claim.

A zero-depreciation car insurance rider can be bought if you have purchased a new vehicle, or for a vehicle not older than three years. So, if your car is more than three years old, you will have to buy normal car insurance.

In order to ensure that people do not make meaningless claims, zero depreciation car insurance comes with a restriction on the number of claims that you can make annually. This varies from one insurance company to other.

Benefits of zero depreciation in car insurance- 

• Although we mentioned that this policy comes in handy for someone who might be an inexperienced driver, this policy will be equally handy for seasoned drivers. Accidents are unpredictable and the financial liabilities arising from an accident can be heavy on the pocket. Even experienced drivers can benefit from zero depreciation car insurance coverage.
• When your car is damaged in an accident, you are required to cover the cost of the depreciation but not when you have zero depreciation cover. This type of cover reduces your expenses to almost zero. This means the insurance provider will be required to take care of literally all expenses.
• Finally, when you file a claim and have a zero depreciation cover, the expenses incurred due to the repair or replacement of insured parts will be settled without taking into consideration the depreciation value of the car.