Once you have selected the perfect vehicle for your use and your purpose, the next crucial step is deciding on an insurance policy. The Motor Vehicles Act of 1988 makes it mandatory for all vehicle owners to have insurance coverage besides registration of their vehicles. Thus, as a vehicle owner, you must make an informed choice about your motor insurance policy.
Vehicle insurance plans are available mainly in two types — a third-party policy and a comprehensive policy. Third-party plans provide limited coverage, also known as liability-only cover. This includes coverage for injuries, as well as property damage to a third person when you are involved in an accident. The coverage of these liability-only policies may often prove to be insufficient. Thus, you can opt for comprehensive coverage. Besides third-party cover as a part of the policy’s scope, comprehensive plans also provide protection for damages to your vehicle. So, the repair costs to your vehicle can be covered. In addition to that, comprehensive policies also allow you to customise the coverage using add-ons. One such popular add-on that you can consider is the zero-depreciation cover.
Depreciation is the devaluation of your vehicle due to natural circumstances like wear and tear, usage, and obsolescence. Other than the engine and the moving parts, other components of the vehicle are also impacted by depreciation. This has an adverse impact on the insurance claim at the time of repairs. The compensation paid by the insurance company reduces due to depreciation. It can range between 5% to 50% based on the age of the vehicle.
But when you have a zero-depreciation cover, it helps to eliminate the impact of depreciation which lowers the compensation. Thus, a higher pay-out is made by the insurer at the time of the insurance claim.
Here are a few things to know about a zero-depreciation add-on cover:
- The zero-depreciation cover is an optional facility offered by your insurer. It is available separately and differs from the standard policy coverage.
- Considering it is optional coverage in a comprehensive policy, an additional premium is levied when you opt for it.
- Zero-depreciation add-on is available for vehicles not older than five years or seven years by some insurance companies. Thus, no protection will be available at the time of vehicle insurance renewal for vehicles older than seven years.
- The zero-depreciation cover helps limit the out-of-pocket expenses which otherwise might be steep.
- Zero-depreciation, which is also known as nil depreciation cover, may have certain conditions which limit the number of claims that can be made during the policy’s tenure. You can confirm these terms at the time of policy purchase.
- Zero depreciation plans can be added only to a comprehensive policy and not a third-party insurance policy.
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Other than a zero-depreciation add-on, you can also opt for essential add-ons like an engine protection cover, bumper-to-bumper cover, and more. Although these add-ons impact the overall price, they do add significant value to the insurance coverage.
If you are confused in deciding which policy to select, you can make use of a motor insurance calculator. This tool helps shortlist policies based on price as well as the features it has on offer. * Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
