Why Zero Depreciation Add-Ons Are the Smartest Upgrade to Your Comprehensive Car Insurance?

Car owners believe a comprehensive car insurance plan includes overall coverage of the car. In reality, while settling claims, insurers deduct the depreciation costs. This is approximately 30%-50% on fast-depreciating car parts such as plastic, fibre, and metal. For instance, if the bumper costs around ₹15,000, you still have to pay ₹7,000 yourself.

So, choosing a zero-depreciation add-on, however, eliminates these deductions. This add-on ensures you receive the full repair costs, except for the deductible amount. Continue reading to learn about zero depreciation car insurance in detail.

4 Reasons to Choose the Zero Depreciation Add-on to Comprehensive Car Insurance

Here are the reasons why choosing a zero depreciation add-on on comprehensive car insurance can be beneficial for you:

Full Repairing Coverage

If your car’s repairing cost is ₹20,000, choosing a standard policy might charge ₹6,000 for depreciation costs and pay you ₹14,000. But with the zero-depreciation add-on, you will receive the full amount of ₹20,000 and save from your out-of-pocket costs.

Enhanced Protection for New Cars

New cars lose value quickly, but a zero-depreciation add-on can safeguard you from that loss. Designed primarily for vehicles less than five years old, it ensures complete coverage for depreciating parts like plastic, rubber, and fibre, so you receive the full claim amount without deductions for wear and tear.

Increase Claim Settlement Ratio

Buying the zero-depreciation add-on mitigates the gap between the actual damage amount to your car and the claim settlement amount.

For example, if the repair cost is ₹30,000, the insurance company will settle the claim for ₹10,000 after deduction of depreciation value. But if you choose zero depreciation car insurance, the company will settle the full claim amount of ₹30,000, thereby raising the claim settlement amount.

Safeguards from Financial Loss

With a zero depreciation add-on, you are controlling the spending of your hard-earned money. Without zero depreciation, you need to pay the unpaid claim portion, deducted as depreciation. And if the damage caused to your vehicle is considerable, the repair bill will be higher, and you will need to pay out of your pocket.

Zero Depreciation Car Insurance vs Comprehensive Car Insurance

The table below highlights the differences between a zero-depreciation add-on and comprehensive car insurance.

Parameters	Zero Depreciation Add-on	Comprehensive Car Insurance
Meaning	This is an add-on under which the policyholder is not charged for depreciation during the claim process.	A comprehensive car insurance provides coverage for both own damage of the car and third-party liabilities.
Coverage	Provides comprehensive coverage and zero deductions on the vehicle and its parts	Provides coverage for own damage and third-party liabilities
Premium	Charges a higher premium in comparison with a standard comprehensive policy	Charges a low premium compared with a zero-depreciation add-on
Car’s Age	Applicable for vehicles aged 10 years or less	Applicable for vehicles aged up to 15 years
Claim Amount	100% Claim Amount	Charges less than the claim amount, considering the depreciation

5 Factors to Consider Before Selecting the Zero Depreciation Add-on

Age of the Car

Zero depreciation add-on coverage is usually applicable for cars aged 5 years or less. Older vehicles are generally not eligible for this coverage. For example, an insured individual with a 9-year-old sedan does not qualify for this add-on during renewal.

Additional Premium Amount

The premium amount for this coverage is approximately 15-20% higher compared to a standard comprehensive policy. For instance, choosing this add-on can raise your premium amount from ₹15,000 to ₹18,500.

Parts Excluded

Car parts such as batteries, tyres and damage caused to the engine due to water are excluded. Even choosing the zero-depreciation add-on, you might need to bear these expenses from your pocket.

Claim Limit

Some insurers allow only 2 claims per policy per year with the zero-depreciation add-on coverage. After this, normal depreciation rules are applicable.

Repairing Network

To get maximum benefits, it is vital to go for an authorised garage. If anyone goes to any local workshop for the replacement of the bumper, they may have to pay a part of the bill amount, even in case of add-on coverage.

Final Words

All in all, a zero depreciation is not a mere add-on. Instead, it is a protective financial instrument against the deduction of depreciation charges while repairing cars. This policy is useful for any premium and newly purchased car owners who want the process of claiming to be a hassle-free experience. Although choosing this add-on increases your premium cost, it compensates for the total expense of car components without any deductions.

An individual with this add-on is even said to have saved around ₹30,000 in a single accident claim compared to a normal policy. It is therefore a good upgrade for anyone seeking peace of mind.

---