Zero depreciation car insurance: All you need to know

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Car insurance is extremely helpful for every car owner. It protects you from the financial impact of numerous unfortunate events. It is also mandatory for driving a car in any public place in the country according to the laws of the land. Depreciation is the reduction in value of your car and its parts due to wear and tear. In case of a claim, the insurance company will provide compensation based on the depreciated value of the vehicle and its parts.

Two things lead to the depreciation of a car: i) wear and tear, and ii) age.

The insurance regulator of the country, Irdai, has set uniform depreciation rates for cars.

Zero depreciation insurance

As the name suggests, a zero-depreciation car insurance is a comprehensive car insurance policy, with the zero-depreciation cover. With the help of such a cover, you get maximum reimbursement during the time of claim. But this add-on only operates up to two times in a policy period.

Benefits

Generally, the insurance premium on a zero-depreciation policy is higher. However, it has additional benefits too.

– As depreciation cost is not taken into consideration while filing for a claim settlement, it helps to save money.

– Most of your claims regarding the insured parts are settled without any depreciation calculation.

– It provides more value to the basic automobile insurance coverage.

Exclusions

These are the exclusions on zero-depreciation car insurance. Take a look:

– Driving without a driver’s license is not covered under zero-depreciation insurance.

– Usually it does not apply to vehicles that are more than five years old.

– Driving under intoxication is completely against the law. If found driving under the influence of alcohol, your claim will not be entertained at all, no matter what the type of the insurance is.

– A zero depreciation cover doesn’t cover mechanical breakdowns of your car and cost of engine oils.