All car owners must possess car insurance as per the Indian Motor Vehicles Act, 1988. Currently, several insurers are offering different types of car insurance plans that serve the unique needs of people. With the availability of more and more car insurance policies in India, opting for the best-suited insurance plan becomes a tiresome and stressful task.
Primarily, there are 2 types of car insurance plans in India- comprehensive car insurance policy and third-party car insurance policy. The comprehensive car insurance policy covers injury and damages to self as well as the third party. Whereas the most basic car insurance policy only covers the third party.
Learn about zero-depreciation car insurance cover
Nil-depreciation car insurance or zero-depreciation car insurance is more of an add-on cover that offers entire coverage for the impairments that occurred to your car. Add-ons are additional benefits offered by insurance companies. In order to buy add-ons, you need to pay additional premium.
Zero-depreciation add-on recompenses repairs for the car, avoiding any sort of devaluation. In simple words, it means that the insurance company pays the overall expenses required for repairing the car.
Perks of opting for zero-depreciation cover
If a car gets stolen or runs into an accident, then the insurer recompenses the car insurance claim considering factors like the value of the car. While calculating the car’s value, depreciation of the vehicle is considered. Depreciation can lead to a lower claim settlement amount. However, the zero-depreciation cover gives full settlement without any depreciation.
Please note that if you want to buy a zero-depreciation add-on, then the car you want to insure isn’t more than three years old. The depreciated value of car parts is superseded on zero depreciation plans.
Different rates of depreciation
In simple terms, depreciation denotes the loss of value on the actual cost of the asset due to its use over time. Usually, the insurance company decides the depreciation value of all materials and parts.
More degrading parts like plastic or rubber in tyres, batteries, and more: 50%
Metallic parts as per the vehicle’s age: 0-50%
The additional premium for availing Zero-Depreciation
The Insured Declared Value of the vehicle determines the premium to be paid. As an insurance policyholder, you can only claim this maximum value in case of damage or loss of your vehicle.
Purchasing a zero-depreciation add-on can save you a lot of money. Hence, it is wise to get this add-on to enhance your car insurance.