Post on 21-Apr-2017
Zero Depreciation
Should you or should you not buy one?
What is Zero Depreciation?
What is Zero Depreciation?
Zero Deprecation or Bumper to bumper is an add-on that you
buy along with your car insurance. It covers you even for costs
of depreciated car parts when you make a claim.
Remember that this add-on is available only on comprehensive car
insurance and not with third-party liability cover.
What is Zero Depreciation?
Zero Depreciation or Bumper to bumper is an add-on that you
buy along with your car insurance. It covers you even for costs
of depreciated car parts when you make a claim.
Before we get on to understanding zero
depreciation add-on, let’s understand “depreciated
car parts”
What does Depreciation
mean?
Depreciation in simple terms means a monetary decrease in
the value of your asset (here your car) due to the wear and
tear and usage over the years.
At what rate do your car parts depreciate?
At what rate do your car parts
depreciate?
• For rubber and plastic parts of the car, battery, tyres / tubes etc.50%
• For fibre glass in your car.30%• For metallic parts depending on how old the
car is. 0-50%
At what rate do your car parts
depreciate?
• For rubber and plastic parts of the car battery, tyres / tubes etc.50%
This means that at the time of making a claim, you’d have to pay 50% of
the repair cost for rubber and plastic parts in your car.
Similar is the case with fibre glass and metallic parts also.
Let’s understand this with an example…
Let’s say, you own a standard hatchback which is 2 years old.Your car is damaged in an accident. You take it to the garage for repairs
and they slap a bill of Rs. 1,50,000 on you.
If you had just a comprehensive car insurance [without zero depreciation add-on] the insurance company will not pay for
car parts like tubes, fibre glass etc. These could amount up to Rs. 40,000 of the repair costs in this case.
If you had a zero depreciation add-on, you wouldn’t have to pay for even those depreciated parts. Barring the minimal deductions, your
insurance company will pay you, bumper to bumper.
Benefits of Buying a Zero Depreciation add-on
100% settlement of cost of the car’s repairs without considering
depreciation during an event of a claim.
No Depreciation01
This is different than having a normal comprehensive
policy. Your zero dep cover will pay you for damages
incurred by the glass, nylon, plastic etc. while normal
comprehensive policy won’t.
Better Coverage02
>
03
Your premium might increase if you opt for
zero dep cover. But it turns out to be
economical in the long run when you get
better coverage at the time of a damaging
accident.
Economical
What is not covered under Zero Depreciation?
What is not covered under
Zero Depreciation?
- Normal wear and tear
- Damages to accessories, bi-fuel kit
- Damages to the engine
- Damages due to uninsured peril, like drunk driving
- Damages because of mechanical breakdown
What factors should you consider before buying Zero Depreciation cover?
Zero depreciation cover offers
complete coverage without
considering depreciation. So the
premium rises slightly.
Increase In Premium01
There is a limitation for making a claim every year. Inquire
with your Insurer with the number of times you can claim
per year and avoid claiming for minor dents.
Number Of Claims02
03
This coverage is available only for new cars.
Doesn’t make sense to pay higher premiums
for a car as old as 5 years.
Only for New Cars
Is Zero Dep Cover Ideal For You?
Ask Yourself These Questions…
Is Zero Dep Cover Ideal For You?
Do you own a luxury car?
The parts of the car are expensive and so is the
depreciation on such parts.
Are you a new driver?
You are not confident on your driving skills.
Do you live in an accident prone area?
Chances of your car getting wrecked are more here.