A zero or nil depreciation is an add-on cover opted for by car owners and their car insurance policies. With this, the insurer pays the entire claim amount without deducting the depreciation of damaged car components.
Advantages of Zero Depreciation Policy
Higher Claim Amount
You can claim the total replacement costs of insured car parts with a zero depreciation car insurance cover. The depreciation value of the insured parts will not be considered, and you will obtain a higher claim amount.
Safeguard your money
If a policyholder has a standard insurance policy, they will bear car parts depreciation costs. After deducting the depreciation, the insurer settles the claim so that you will pay out-of-pocket expenses. A zero depreciation policy helps you save your hard-earned money as the deprecation value is taken care of by the insurer.
Peace of Mind
A zero depreciation cover protects your car against unfortunate events and provides much-needed peace of mind. It acts as a financial backup and protects you from spending unnecessarily during the settlement of a claim.
Affordable Additional Cost
Securing your vehicle with a zero depreciation add-on cover will offer end-to-end protection to your car at a nominal extra cost.
Adequate Coverage
A zero depreciation cover increases the overall coverage and ensures complete financial protection. You no longer have to worry about the coverage of high repairment costs and reduction of the claim amount.
Disadvantages of Zero Depreciation Policy
High Premiums
Buying zero depreciation cover provides your car with additional protection and attracts a high premium.
Limited Claims
There is a limit on the number of claims a policyholder can raise against zero depreciation cover. It helps prevent unnecessary claims for minor issues such as scratches and bumper dents. Most insurers allow a maximum of two claims under the cover.
Age Limit
You can get a zero depreciation cover for cars not older than three years. You should not look for this cover if your vehicle is over three years old due to high premiums.
Additional costs
A zero depreciation policy doesn’t cover all car components and additional costs of brake oil, engine oil, coolants, and others.
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