Cars are a depreciating asset. Over time, wear and tear leads to the reduction in the value of the car. This can have a significant effect on your insurance. In case of an accident, you may have to pay some amount of repair expenses out of your own pocket as your insurance company will take into consideration the depreciation on the value of the parts replaced. Many car owners who opt for standard car insurance cover are often unaware of this fact. This can cause a lot of heartburn as the owner may end up shelling out a lot of money on car repairs. However, such a situation can be avoided by opting for a zero depreciation cover.
What is a zero depreciation cover?
A zero depreciation cover is a car insurance plan that offers full claim without any deduction for depreciation. This means, in case of an accident, the car owner will get the full claim without any deduction on the value of the car parts replaced. In other words, the entire repair expenses will be borne by the insurance company and the car owner won’t have to pay anything out of his own pocket.
How is a zero deprecation cover different from a normal car insurance cover?
The most important difference lies in the claim settlement. In a zero depreciation cover, the depreciation of your car won’t have any effect on the claim you receive (you’ll get full claim). In a normal cover, the car insurance company will consider the current value of the car and settle the claim accordingly (you’ll not get the full claim).
The amount of premium you pay differs in case of zero depreciation cover and standard car insurance cover. The premiums for zero depreciation cover are higher. The age of the car is another important point on which the two types of car insurance cover differ from each other. Zero depreciation covers are usually offered only on new cars. A standard insurance cover can be taken on an older car as well.
What are the benefits of zero depreciation cover?
Apart from the obvious advantage of offering full claim in case of an accident, a zero depreciation cover offers a number of other advantages as well. These include:
A zero depreciation car cover pays for any damage incurred upon the glass, plastic, nylon, fiber, etc. of the vehicle. A normal insurance cover doesn’t account for these damages.
The premiums may be high in case of a zero depreciation cover, but it is usually made up when you raise a claim after an accident.
A zero depreciation cover provides complete mental peace as you know that you’ll get full claim in case of car accident.
Many car owners understand the significance of zero depreciation car insurance cover. This type of insurance cover is hugely popular among people who own expensive cars as the repair costs of these cars can be quite high. Zero depreciation cover is also preferred by those who travel long distances and in accident prone areas. In general, opting for a zero depreciation cover is an excellent way to gain complete peace of mind.