Traffic can be a big headache, especially if you use a four-wheeler to commute from one place to another.
A large chunk of our population shows no sense on the road, and it’s generally this group of people who are the main cause or are involved in accidents that occur on our streets.
Having good vehicle insurance can help minimize the amount of money you spend on repairing a vehicle that has met with an accident.
Zero Depreciation Insurance Cover Importance
But, insurers can sometimes offer a lesser sum of money as compensation for damages incurred by your vehicle.
This tends to happen to people who have taken out a comprehensive insurance cover for their vehicle but fail to take out a rider, which would benefit your insurance cover.
Zero Depreciation Cover is a rider who provides full compensation for any damage your vehicle could be subjected to in an accident.
What is Zero Depreciation Cover?
Known as Bumper-to-Bumper Cover, Zero Depreciation Cover offers compensation to the policyholder when needed without considering the vehicle’s depreciation value.
The plan offers complete cover for your prized four-wheeler without factors like damage-caused or age-related depreciation playing a part at the time of compensation.
This cover eliminates any bills for repairs that you will have to clear if you didn’t purchase this cover, along with the base insurance plan for your vehicle.
The plan offers coverage for the cost incurred by the policyholder for repairing glass, fibre, plastic, and rubber parts.
Any amount that has to be spent on replacing parts of the vehicle due to an accident is completely covered by this plan.
Insurance agencies generally offer the Zero Depreciation Cover for relatively new cars (up to 5 years old), and this plan can be purchased by paying a cost that comes up to 15%-20% of the standard premium amount.
What is the difference between this plan when compared to a Standard Motor Cover?
In a Standard Motor Policy, the rate of depreciation can range from 0% to 40%, and this depends on a few factors like the type of material used, the age of the vehicle, etc.
With this plan, a policyholder will have to shell out money for any repairs that do not get covered under the policy.
But with a Zero Depreciation Cover, no depreciation value is charged and hence, the policyholder will be entitled to a 100% reimbursement of parts.
Another main difference between the two types of plans is that the premiums paid towards a Zero Depreciation Cover are a lot more costly when compared to a Standard Motor Cover.
Who should purchase this cover?
Ideally, anyone who owns a four-wheeler and plans on protecting it from the costs of repairs incurred in an accident should pick up an insurance cover as a basic plan along with the Zero Depreciation Cover.
Owners of new vehicles, luxury vehicles, or anyone afraid of their vehicle getting damaged on the road should consider purchasing this cover.
This cover can be a little more expensive when compared to a Zero Depreciation Cover. But the benefits of this cover are a lot more intriguing and can comparatively cost less than paying for the replacement of parts or repairs.
How do I purchase a Zero Depreciation Cover?
A customer who wishes to purchase a Zero Depreciation Cover can do so when purchasing the base cover for their vehicle.
This can be done by paying the extra premium required to come under the umbrella of benefits of the Zero Depreciation Cover when making the premium payments for the comprehensive insurance cover.
Advantages of a Zero Depreciation Cover
The main advantage of a Zero Depreciation Cover is that you do not have to shell out any money out of your pocket when repairing your damaged vehicle.
With the Zero Depreciation Cover, the insurer will have to bear most of the costs of repairing or replacing parts of a damaged vehicle.
When a customer opts to purchase a Standard Motor Cover, the policyholder will have to cover a chunk of the cost of repairs. At the same time, the entire amount is paid off by the insurance company with a Zero Depreciation Cover.
As this plan eliminates the need for a policyholder to pay for repairs out of their pocket, it is more viable to choose this plan over a Standard Motor Cover. You will have to consider a few factors before purchasing a Zero Depreciation Cover.
It is not advisable to purchase this cover for a relatively old vehicle, as the replacement and repair charges are relatively cheaper when compared to the work done on a new or luxury vehicle.
You will also have to consider the make and model of the vehicle, location, and frequency of accidents met in the same vehicle.
There is a restriction on the number of claims that a policyholder can make with a Zero Depreciation Cover in a year.
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