Today’s topic is quite important in which we are going to talk about Zero Depreciation Car Insurance.
What is Zero Depreciation Car Insurance?
When you buy a car, the dealership provides you an option namely “Zero Depreciation Car Insurance”; which is also known as “bumper to bumper car insurance” and it’s said that it’s full protection cover.
So the aim of this content is to know that whether it is a full protection cover? And what are its hidden claws?
• When you opt for “standard policies” which is also known as “comprehensive policy”
• It includes two types of coverage apart from a third party:
- In case the car got stolen you will receive all the money which is in short your declared value.
- In case the car suffered an accident; the insurance company passes on the claim of the damage cost of the car.
• Now, the car includes various parts such as; plastic parts, metal parts, fibre parts, wooden parts, tires, etc. On these items, the insurance company deducts some amount of depreciation; under which 50% of the items include plastic parts, metal parts, and the rest of the other body parts. E.g. in case, you think of painting your car and if the bill of the painting cost is separate the insurance company will cut it off to 50% of the painting cost. Except that there are airbags on which 50% depreciation is deducted.
So basically, zero depreciation car insurance meaning is that you will not get the actual cost of the part. It will just deduct some amount of depreciation; no matter if your car is one year old or five years old.
• There is some matrix in which on some parts there will be slab-wise depreciation and on some parts. There will be a depreciation of a flat 50% that will be deducted.
So, the Zero Depreciation Car Insurance ensures that you get the whole value of the parts. And there is no need to add your money under this claim.
• It might seem quite overwhelming to you that all these things are covered under the claim but in this policy; there are some exclusions as well which are very important to know.
• Zero depreciation is only applicable on cars that are not older than five years. That is, if you buy a new car you will receive zero depreciation only for the first, second, third, fourth, and fifth year not more than that. If the age of your car is more than five years zero depreciation will not be applicable to your car.
• Second claw is that you will only be permitted to claim twice a year in Zero Dep policy; which is not a condition in other normal policies.
• Third thing to remember is that if the change of consumables takes place; such as engine oil, brake fluid, coolant, gear oil, there is no cover provided under “standard zero dep policy”. If you want to cover your consumables you will have to again opt for an ad on which is called “consumable cover”; which means you have to take it as a double premium except for zero depreciation premium.
So when you select an insurance policy; you have to ask the insurance company that, is there a product offering that covers consumables?
And the most important thing, it does not include engine protection cover standards by default.
What is engine protection?
In case the car went through an accident and if there happens a leakage of engine oil. If you still drive your car in that condition then the engine if your car gets seized. In that specific case even if you own a plan of Zero Dep; the company will not pay the claim unless it has engine protection cover.
E.g. you are driving your car in a flooded area in a rainy situation and you are stuck and the engine of your car stops working; in that case, you won’t receive a payoff under “standard zero dep policy”. You will have to buy an engine protection cover for that.
It’s also included in the policy that in case of a mechanical breakdown; like if your car suddenly stops while you are driving, it will not be covered under the standard policy or zero dep policy. In that case, it becomes a part of the warranty.
• In case some of the wear and tear items of the car get spoiled such as clutch pad and the brake pad; it doesn’t cover it under the plan whether it’s Zero Dep or Platinum plan in which engine protector is also covered.
What is Salvage?
When the replacement of the parts takes place some amount of salvage is deducted against the previous parts which remain under 5% to 7%.
• The last thing which remains is the “compulsory deduction”; which is mostly found in mid-segment cars will also not be covered under the claim.
So with respect to the pros and cons,
In case your bumper, fender, or door panel, boot replaces then you will receive 100% protection of the cover under Zero Dep policy.
And in case if you want additional protection of the car such as engine cover; that you have to pay for an additional premium, salvage value will be deducted. And you can only maximum of two claims per year.