Four-wheeler vehicles have become an essential asset for the masses over the years. Nevertheless, it is important to be mindful of the amount of risk involved in owning a car due to the wear and tear of its parts with use and the chances of accidental damage. Hence, getting car insurance
for the protection of their vehicles is a necessity for every car owner. While having Third-party motor insurance is mandatory by law in India, adding a Zero Depreciation Cover to your comprehensive plan is a matter of choice. Most people opting for Comprehensive car insurance do so because of its holistic coverage. However, this coverage can be extended using add-ons or riders. One such add-on is the Zero Depreciation Cover, also known as Nil Depreciation or Bumper to Bumper cover.
How Does Zero Depreciation Work?
During the settlement of a claim for damages to one’s car, the insurer takes into account the insured car’s age along with the depreciation or wear and tear to its parts. Hence, the final claim amount that is received comes with a standard deduction of depreciation. However, with the Zero Depreciation add-on, the insurer will no longer consider the depreciation of the insured car and is obliged to provide the full claim amount depending on the extent of the damage.
Zero Depreciation Cover vs Comprehensive Insurance
The first difference between the Zero Depreciation Cover and comprehensive insurance is that latter is a type of insurance policy while the former is an add-on cover that may be added to a comprehensive insurance plan. Hence, the purpose of Zero Depreciation Cover is to reduce the deduction on the total claim amount. On the other hand, Comprehensive Insurance provides far-reaching benefits and holistic protection to a car. Therefore, a Comprehensive Insurance policy can be enhanced using Zero Depreciation Cover while buying the insurance policy or at the time of policy renewal.
Why Get A Zero Depreciation Add-on?
Depreciation is an unavoidable part of all assets. With the passage of time, the quality of all things starts to deteriorate, and automobiles are no different. It helps the policyholder reduce the payable expenditures from their pockets due to no deductions based on any depreciation from the claim amount. This causes minimum or no financial loss on the part of the policyholder in case the car undergoes any damage. It is useful for people living in a risk-prone area with higher chances of damage to the car to have Zero Depreciation cover. This cover also proves to be of great value for people who have a luxury car, with expensive parts and components.
Therefore, the Zero Depreciation add-on is highly recommended for those who have to use their cars regularly. Additionally, cars that undergo heavy usage get more prone to damage over time. But with Zero Depreciation cover added to your car insurance, you can avoid any deductions in dire times of need and be stress-free.
