Zero Depreciation Car Insurance
Looking for car insurance? You’ve come to the right place! MyPolicyExpress offers an excellent range of car insurance plans, with feature-packed add-on covers like our Zero Depreciation Cover.
What is Zero Depreciation Car Insurance?
Depreciation is an add-on cover in car insurance that eliminates the effect of depreciation on your policy. Typically, when your car is damaged, the claim amount you receive factors in the depreciation caused by age and usage.
With a Zero Depreciation Cover, you get the full value of your car’s components during an insurance claim without deductions for depreciation. Adding this cover boosts your car insurance plan’s coverage and provides greater financial protection for your vehicle.
A Zero Depreciation Cover ensures that depreciation does not affect your car insurance plan, making it a smart choice for car owners. Among the car insurance providers in India offering zero depreciation coverage, MyPolicyExpress stands out with its strong track record of delivering top-notch customer service.
What is Depreciation?
Depreciation is the reduction in the value of an asset. In car insurance, depreciation is the consistent decline in the value of your car’s components due to age, usage, normal wear and tear, etc. Therefore, the depreciation accumulated on your vehicle is directly proportional to its age.
The Insurance Regulatory and Development Authority of India (IRDAI) sets the depreciation rate for all vehicles in India. Below is a table showing the annual depreciation accumulated on your car.
| Age of Your Car | Depreciation Percentage |
|---|---|
| For all rubber, nylon, plastic parts, tires, tubes, batteries, and airbags. | 50% |
| For all Fibre Glass Components | 30% |
| For all Parts Made of Glass | Nil |
The depreciation rate for all other parts, including wooden components, follows the schedule below:
HTML Table
| Vehicle Age | Depreciation Percentage |
|---|---|
| Not exceeding 6 months | Nil |
| Exceeding 1 year but not exceeding 2 years | 10% |
| Exceeding 2 years but not exceeding 3 years | 15% |
| Exceeding 3 years but not exceeding 4 years | 25% |
| Exceeding 4 years but not exceeding 5 years | 35% |
| Exceeding 5 years but not exceeding 10 years | 40% |
| Exceeding 10 years | 50% |
With a Zero Depreciation Cover, you can claim the full amount for the damaged components of your car in an insurance claim. This means that, for your insurance plan, your car experiences no depreciation.
If you want full insurance coverage for your car, you should choose zero depreciation car insurance. Whether you’re a new car owner, an experienced driver, or a sports car enthusiast, adding a zero depreciation cover to your plan can protect you from the impact of depreciation on your car’s parts, especially in the form of a reduced insurance claim payout.
Here is a list of individuals who should consider opting for Zero Depreciation Car Insurance.
New Car Owners
If you’ve recently bought a new car and are exploring car insurance options, you should add a zero depreciation add-on cover to your chosen plan. This will provide comprehensive insurance coverage for your car.
Sports Car Owners
Owning a sports car brings excitement and pride, but with high prices come expensive components that are often difficult to repair or replace. Therefore, it’s recommended for sports car owners to opt for zero depreciation car insurance.
Luxury Car Owners
If you own a luxury car, repairing its components can be costly, even with a good car insurance plan. That’s why you should not hesitate to choose a zero depreciation cover for your luxury car.
Advantages of adding a Zero Depreciation Car Insurance Cover
A Zero Depreciation Car Insurance Add-on Cover offers several benefits:
Increase in Coverage:
By adding a zero depreciation cover to your car insurance plan, you increase the overall coverage for your valuable vehicle. This way, you won’t have to worry about the high repair costs for various car parts or a reduced insurance claim amount.
The cost of Zero Depreciation Car Insurance:
Adding a zero depreciation cover provides extra protection for your car, which comes with an additional cost. This cost increases your total car insurance premium.
Coverage of Zero Depreciation Insurance:
Zero Depreciation Car Insurance does not eliminate depreciation for all car components. Some parts, such as those made of glass, are excluded from the add-on coverage. Additionally, the depreciation deduction for certain parts is not fully 100% but instead follows specific percentages. Therefore, you should review the coverage of a zero depreciation cover before purchasing it.
Claim limit:
There is a cap on the number of claims you can make under your zero depreciation car insurance cover. You can file a maximum of two claims during the term of your car insurance policy.
What does a Zero Depreciation Car Insurance Add-on Cover exclude?
Understanding the exclusions of your zero depreciation cover is essential. Here are the key things not covered by a zero depreciation car insurance policy:
Damage caused by Driving under the Influence
If your car is damaged while driving under the influence of alcohol or narcotics, any insurance claim for repair costs will be invalid. This is because no car insurance policy covers damages resulting from driving under the influence.
Claims after the second one during the policy term
The zero depreciation cover in your car insurance policy applies only to the first two claims made during the policy term. Any additional claims beyond these will not be eligible for zero depreciation benefits.
Damage caused by Driving under the Influence
If a privately owned car is damaged while being used for commercial purposes, any insurance claims for those damages will be invalid. This restriction also applies to your zero depreciation cover.
Review the policy terms of your zero depreciation cover to understand the complete list of inclusions and exclusions in the plan.
Zero Depreciation Car Insurance Claim Settlement
During claim settlement, standard car insurance policies typically deduct depreciation percentages from various car parts, as outlined in the policy terms.
For example, nylon, plastic, and rubber parts, including batteries, often incur a 50% depreciation charge, while fiberglass components face a 30% deduction, and wooden parts see 5-10% depreciation. However, choosing zero-depreciation car insurance removes these deductions completely.
With zero depreciation coverage, you don’t have to pay any costs related to depreciation during claim settlement. As a result, you receive the full claim amount without any deductions for depreciation on your car parts.
In contrast to standard car insurance plans, where you receive reimbursement for losses after depreciation is deducted from replaced parts, zero depreciation coverage ensures no such deductions.
Zero depreciation provides peace of mind by guaranteeing maximum compensation for repairs or replacements without depreciation deductions. This extensive coverage is particularly helpful for new vehicle owners or those who drive in conditions that make their cars more prone to damage.
Factors Influencing Zero Depreciation Car Insurance Premium
Several factors influence the premium for your zero depreciation car insurance, such as:
Age of your car
The depreciation rate of a vehicle increases with its age. As a result, the age of your car significantly affects the accumulated depreciation, which directly impacts the premium you pay for your zero depreciation cover.
Make and model of your car
These factors play a key role in determining your car's Insured Declared Value (IDV). A higher IDV leads to higher premiums for both your car insurance and zero depreciation cover.
Your Driving Location
The area where you typically drive your car significantly influences your car insurance premium. If you reside in a low-traffic area, your car insurance and zero depreciation cover premiums will likely be lower compared to someone living in a high-traffic zone.
Key Differences Between Zero Depreciation Car Insurance Add-on Cover and Comprehensive Car Insurance Policy
A comprehensive car insurance plan and a zero depreciation cover differ in several ways. The table below provides a concise summary of these distinctions.
Choose our Comprehensive Car Insurance Policy and add a Zero Depreciation Cover to enjoy extensive financial protection for your car
| Criterion | Zero Depreciation Car Insurance Cover | Comprehensive Car Insurance Policy |
|---|---|---|
| Nature | You can get Zero Depreciation Car Insurance as an add-on cover. | You can get a Comprehensive Car Insurance Policy as a standalone plan. |
| Coverage | A Zero Depreciation Cover offers the advantage of eliminating the depreciation accumulated on your car, along with the benefits provided by your base car insurance plan. | A Comprehensive Car Insurance Policy provides broad coverage for your car, including damages from accidents, fire, transit, and both natural and man-made disasters. It also covers total loss events, such as theft or irreparable damage to your car. Additionally, you can enhance this plan by adding various add-ons. |
| Depreciation | By choosing this cover, you can claim and receive the full amount for repairing or replacing your car's parts. | By choosing this policy, you can secure comprehensive coverage for your car. It also provides a Personal Accident Cover of ₹15 lakhs for the Owner-Driver of the insured vehicle. However, any car insurance claim under this plan will account for the depreciation accumulated on your car. |
| Premium | Adding this cover to your base car insurance policy will increase your car insurance premium. | The car insurance premium for a comprehensive policy will be lower before you add a zero depreciation cover. |
| Eligibility | Cars which are less than five years old are eligible for this cover. | This policy is available for all cars, regardless of their age. |
| Purchase | You can purchase a Zero Depreciation Car Insurance Cover as an add-on to a Standalone Own Damage Car Insurance Policy or a Comprehensive Car Insurance Policy. This cover cannot be bought as a standalone plan. | You can purchase a Comprehensive Car Insurance Policy as a standalone plan. |
| Number of claims permissible | You can make two claims against your Zero Depreciation Cover during the term of your car insurance policy. | You can make unlimited claims against your Comprehensive Car Insurance Policy during its term. |
Why choose a Zero Depreciation Car Insurance Add-on Cover?
If you’re unsure about choosing a zero depreciation cover, the following reasons might persuade you:
It Offers Greater Insurance Coverage for Your Car
Opting for a zero depreciation cover provides enhanced protection. While a comprehensive car insurance policy offers extensive coverage, the claim amount you receive will be reduced by depreciation. Therefore, it's important to complement your comprehensive policy with a zero depreciation add-on.
It Eliminates Depreciation From Your Car Insurance Claim
By choosing a zero depreciation cover, you eliminate the impact of depreciation on your car insurance policy and claims. This allows you to claim the full amount for repair or replacement costs without any deductions for accumulated depreciation.
It Lowers Your Total Repair Costs
Repairing or replacing your car's components can be expensive. Since your car insurance provider typically reduces the claim amount for depreciation, you may end up covering a significant portion of the costs yourself. Therefore, opting for zero depreciation car insurance is a wise choice.