Zero depreciation insurance is also known as bumper-to-bumper four-wheeler insurance or nil depreciation insurance. The insured may not have to pay the depreciation value of the damaged or replaced parts with zero depreciation coverage, and the policyholder can claim the total amount. It applies to vehicles under five years old, and the policyholder may use it twice during the policy term.
What does a car insurance policy with zero depreciation mean?
If you have zero depreciation coverage, you can claim the total cost of replacement car parts in the event of an accident. The depreciation value of the damaged parts may not reduce the claim amount. As a result, it saves* you a significant amount of money.
Should you get zero depreciation car insurance?
If you have recently bought a car or have a relatively new car, a zero depreciation policy makes sense. Alternatively, people may consider buying it for the following reasons:
- If you own high-end automobiles
- If you are a new driver
- If you drive in high-accident areas
- If the spare parts for your car are expensive
- If you want to reduce on your personal expenses
What are the advantages of a car insurance policy with zero depreciation?
It helps reduce out-of-pocket expenses to almost zero without considering depreciation on car parts, which is why it is known as a nil-depreciation policy. It protects against financial loss and compensates for the total cost of repair or replacement.
How is the premium for zero depreciation car insurance calculated?
Some factors that are considered when calculating the car insurance prices along with zero dep coverage are :
- Engine type:
Vehicles with higher cubic capacity have a higher premium than those with lower cubic capacity engines.
- Installation of accessories:
The premiums are calculated separately for car accessories and any added additional features.
- Coverage type:
The premium rate is also affected by your chosen coverage. Comprehensive car insurance premiums are likely higher than third-party car insurance premiums.
Depreciation in automobile insurance
The insured declared Value (IDV) is the car’s current market value. After deducting the depreciation cost of the vehicle, the insurance provider determines the maximum Sum Insured. The IDV is provided in the event of total vehicle loss or theft.
Insured Declared Value = (Manufacturer’s List Price – Depreciation) + (Accessories not included in the listed price – Depreciation)
How can I renew my zero dep car insurance online?
Car insurance renewal is simple and painless, especially if done online. Let’s look at it’s practice and uses –
- Keep track of the renewal date:
The insurer or policy aggregator can typically send a reminder via phone or email.
Enter the necessary policy information – When renewing zero depreciation car insurance online, there is no need to run from pillar to post for paperwork, cheque submission, etc. It is possible to continue your policy online by selecting the policy renewal option.
- Observe the instructions:
Submit all required information, complete the form, and select a payment method.
- Pay the insurance company online:
You can pay the insurance company online with a debit or credit card.
An acknowledgement of the zero-depreciation four-wheeler insurance renewal would be sent to your registered email address and phone number.
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.‘
*All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
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