Due to rising road accidents and increased uncertainty, car owners have started investing in decent car insurance. While some buyers consider all the necessary aspects before finalizing car insurance online and offline, others tend to make a less thoughtful decision.
Be it a car, bike, or any other vehicle, they all are subject to depreciation, which significantly affects the claim amount. If you’ve taken car insurance via Paytm insurance broking or other means without the zero depreciation coverage, you may end up in great trouble.
What is Zero Depreciation Car Insurance?
Zero depreciation car insurance refers to a comprehensive car insurance policy wherein your claim amount is calculated on the actual vehicle value and not the depreciated value. Like umbrella insurance covers you against liability damages, the zero depreciation add-on covers you against a depreciated claim amount.
If you have taken zero depreciation insurance, you will be compensated the actual value if your car meets an accident or requires heavy repair expenditure. But if your insurance doesn’t cover zero depreciation, your finances can be seriously strained as you will have to look after the out-of-pocket expenses in an accident, repair, or other unfortunate scenarios.
Significance of Having Zero Depreciation Car Insurance
When looking for car insurance online, always search for policies offering zero depreciation coverage. As Airtel Payments Bank is now offering car insurance in collaboration with Bharati AXA, you may check if they’re offering any comprehensive car insurance or not. The benefits of getting a zero depreciation cover policy are many, and it can save you from severe financial losses in case of unfortunate incidents related to your vehicle. Still not convinced? Check out the following top benefits of getting a zero depreciation cover that is guaranteed to make you rethink your decision of not buying one.
- Get Claim Amount Calculated on Non-Depreciated Value
If you own zero depreciation car insurance, the final claim amount won’t be affected by depreciation. Though some deductibles will always be there, the claim amount won’t reduce significantly as the depreciated value of your vehicle won’t be taken into account. It can save you plenty of money that you would otherwise lose if you choose to go ahead with standard car insurance with no zero depreciation coverage.
Though it is expensive compared to the standard car insurance policy, the security and peace of mind it provides makes it worth the investment. If you already own zero depreciation car insurance, but your loved ones don’t, you can check if Reliance’s Insurance gift card is covering it or not. If yes, you may want to purchase it for your family members.
2. Lessen/Minimize Repair Burden
When you drive on busy and chaotic roads, the chances of road accidents increase significantly. If your vehicle meets an accident any day and gets serious damages, you would want your insurance provider to cover those expenses. If your policy doesn’t include a zero depreciation add-on, the insurance provider will calculate the losses and claim amount on the vehicle’s depreciated value and not the actual value.
It will significantly reduce the claim amount, and you will have to bear the extra expenses from your pocket. But if you have a zero depreciation policy, your pocket expenses will be next to none, as the claim will be calculated on actual car value.
3. No Deduction on Car Parts
Certain car parts are subject to a high depreciation rate, and it can create a dent in your finances if you don’t own a zero depreciation policy. Your car’s rubber, plastic, and nylon parts are subject to 50% depreciation, wooden parts are depreciated as per the vehicle’s age, and fiberglass components are depreciated at 30%. So if any car part gets damaged, you will receive the claim amount after deducting the depreciation value (if you don’t have the zero depreciation add-on). If you want to receive the full amount, you should switch to a zero depreciation policy.
If you look for expert tips before buying a pre-owned car or a new vehicle, you should also consider looking for important points to consider before purchasing insurance. For car insurance, the above-discussed points should have clarified why zero depreciation insurance is better than the standard one and the need to have it.