Zero depreciation cover for your car: How it is advantageous over the regular car insurance?

Updated: Thursday, March 27, 2014, 12:55 [IST]

Ever made a car insurance claim, you might have acknowledged and even might have to pay a hefty amount for the repairs that were left unpaid by your car insurer citing depreciation and other reasons for the lesser claim amount honoured. Nonetheless, zero depreciation cover now comes as a blessing. In case you as a car insurance customer wish to change your existing insurance company. You can do so after taking heed of the few concerns mentioned herein.

The cover is available as a top-up or a rider in addition to the standard cover and extends insurance for repairs and maintenance in full for each of the car part of rubber, fiber glass and plastic.

But nonetheless, the zero depreciation cover for your car against any risk guarantees for total claim without factoring in of depreciation of the asset. So, a zero depreciation cover is in a real sense a comprehensive coverage that offers full settlement coverage while the usual cover purchased for your car insurance needs determines the claim value only after taking into account the current value of car. And the estimations for the extended cover based on the current valuation is arrived at after accounting for depreciation of the car.

So, in case of an accidental claim made against any car damage, for the general car insurance, insurers provide the claimant or the insured for the cost of damages after conferring the current valuation of the car. While in case the car owner holds a zero-depreciation cover, the plan honours full claim or the cost of damages irrespective of the current value of the car without accounting for depreciation.

The set advantage that enables the insured to get the entire cost of the damage is not provided for free. And, here are listed few of the downsides of such an insurance that promises to the foot the entire bill.

1. The promise comes at a substantial cost and premium for such a policy is over 20% higher than the standard no frill car insurance policy. So, such a zero-depreciation car insurance cover might not serve the need of those scouting for a car insurance at a nominal premium. Nonetheless, people who don't mind paying an extra amount to get away with the hassles at thetime the claim is made in respect of the amount honoured by the insured can do so at an extra premium cost.

2. As the insured does not have not to make any expense out of his pocket for any of likely car damage, such as insurance is likely to come with or is offered with a cap in respect of the number of times the claims can be made by the insured for the damages.

3. Most importantly, such a zero-depreciation cover can be secured for the new car only that is at the most 3 years old.

4. Such a top up cover does not covers the wear and tear of the car due to obsolescence, uninsureddamages resulting due to causes not part of the policy or any mechanical breakdown. Also, any damage caused to the tyre, accessory and CNG kits is not covered.

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