Like any other insurance, the relevance and importance of car insurance cannot be denied.
‘Zero Dep Car Insurance’ also known as Zero or Nil depreciation cover, offers complete vehicle coverage barring the element of depreciation. It means, if your car gets damaged following a collision or a major accident, it will not make a dent in your pocket.
Let’s go through the other features and benefits of ‘Zero Depreciation Car Insurance’, which will help you to decide, whether you should opt for it or go with the basic car insurance.
Advantages and Merits of Zero Depreciation Car Cover
Depreciation Not a Problem
When you opt for Zero Dep Car Insurance you straight away get wavier on the depreciation factor of your vehicle.
A brand new car does not inherit the same value once it is taken out of the showroom and loses some of its value.
While making a claim the amount is based on the current value of the car which goes down constantly year by year. In zero depreciation insurance, the depreciation associated with all the materials like glass, plastic, metal that make up your car is ignored which is not the case in basic car insurance.
Good for a New Car
Zero dep insurance is a kind of insurance rider that usually covers only new up to 5 years and some insurers may offer it for a longer period of time therefore it is a good choice for new car owners to go for a comprehensive insurance as the market value of their vehicle is still high in the initial years and by getting full claim amount you not only save money but are also able to keep your car well maintained by timely and effective repair of damages.
Must for a New Driver
Novice drivers should opt for zero depreciation car insurance policy as they carry a higher risk of collision or car damage.
New drivers are more prone to accidents. However, even the most experienced drivers get involved in accidents due to the fault of another vehicle driver. Hence going for a zero depreciation cover makes sense.
Nil depreciation insurance costs anywhere between 15-20% more than the standard or basic car policy and the premium are priced accordingly. But if compared to the risks and repairing cost involved in the first five years of a brand new car it acts as a money saver when compared to the premium attached to it.
Zero depreciation cover provides 100% coverage for all your fiber, rubber and metal parts alike its counterpart in which the claim is based on depreciation factor and a fixed percent of car body parts are reimbursed and the reaming part has to be paid by the car owner.
For example, in a basic car insurance policy up to 50% depreciation can be deducted on rubber, nylon, and plastic parts and up to 30% on fiber-glass components.
In short, when you make a claim, with a basic car insurance cover, the insurer only reimburses the depreciated value of car parts replaced and not the actual one and if your car is brand new, this is expensive!
Long-term Planning Benefits
When you buy a car for yourself or for family needs you don’t know who all will drive it in the future, whether you will appoint a driver or not or your family members will learn to drive a car from the one you own.
Looking at all the factors mentioned above and the risk factors involved, especially in the case of new car learners, zero depreciation cover seems to be a feasible long –term investment.
Contrary to the belief that Zero Dep insurance is effective only for novice drivers, it is vital for protecting even skilled drivers from the financial burden of damages and losses incurred due to accidents as it brings down your physical damage expenses to almost zero.
Luxury Cars Protection
The zero depreciation cover is very useful for owners of luxury or high-end cars due to the high cost of body and spare parts including the risk of incidence of car or body part thefts.
So if you are planning to own a luxury car do consider opting for a bumper to bumper (Zero Depreciation) insurance cover.
If you are a Perfectionist
If you are the kind of car owner that wants to keep his car looking brand new and small bumps and dents makes you conscious and disturbed, zero dep car insurance is the best choice for you.
Safeguards against Unforeseen Expenses
At times when you want to get your car repaired and make a claim, you have to think twice as in a basic car policy you have to make partial payments that can hamper your monthly budget. Often we try to get the car serviced or repaired from an unauthorized service center or car body-paint shop to minimize the expenses without getting the parts replaced, by getting them fixed with cosmetic touches and this in long run spoils the look of your car which ultimately deprecates its resale value.
On the other hand, while you hold a zero depreciation policy you are more secured on the money and quality part.
Aid for Frequent Movers
If you are in a job that makes you relocate time and again, you should consider going for zero depreciation insurance as you have more chances of giving your car in hands of new drivers from time to time and even if that is not the case and you drive yourself new locations and driving conditions can be challenging and to minimize the risks a comprehensive car insurance can be a better choice.
Zero Dep Insurance – Eligibility Criteria and Exclusion Factors
Eligibility criteria and ruling factors to Consider before deciding to buy a ‘Zero Depreciation Cover‘ include that the car that you want to get insured should not be more than 3 years of age.
Zero dep car insurance offers higher coverage than a basic car insurance plan, and therefore, attracts a higher premium.
Such kind of insurance is mostly not offered on cars that are more than 5 years old and for cars that have clocked more than a specified number of kilometers.
Bumper to Bumper car insurance or Nil depreciation cover usually has limitations on the maximum number of claims that can be raised in a year and does not secure and cover costs of damage from engine oil leakage or water ingression.
Standard wear and tear to internal and external car body parts such as clutch plates, tyres; bearings, etc. are also not covered under zero dep insurance.
Other exclusion factors may include major damages and mechanical breakdowns.
A zero dep policy claim will not be honored by the Insurance Company if it falls in the exclusion criteria factors; therefore before opting for it thoroughly go through the terms and conditions and policy features.
Zero depreciation also is known as ‘Nil depreciation or Bumper to Bumper car insurance’ that excludes depreciation factor from the coverage, thus giving you complete cover. In short, if your car gets damaged following an accident, no depreciation is subtracted from the total claim.