How Is a Car Insurance with Zero Depreciation Beneficial Over the Standard Comprehensive Plan?
A car insurance is often regarded as confusing purchase. The myriad plans that are available with varying features makes it a daunting experience, especially for first time buyers. In addition, buyers get it and then forget about it—meaning, you do not interact with it unless needed. Hence, you only know if your policy is right when the time comes. To avoid such last-minute hassles, adequate information concerning the specifics about insurance plan helps.
Whether buying car insurance online or offline, it is essential to understand what it covers, be it a third-party plan or a comprehensive cover. For third-party plans, the coverage is limited to legal liabilities due to a third person due to an accident whereas comprehensive plans compensate for the damages to your car along with such third-party coverage. Further, the scope of a comprehensive policy is customisable using add-on facility. One such add-on is the zero-depreciation cover.
Also referred as a bumper-to-bumper cover, or nil depreciation plan, a zero-depreciation cover eliminates the impact of depreciation in your car insurance claim. A standard comprehensive policy while covering the cost of repairs and damages, considers the effectsof depreciation in determining the pay-out amount. This impact of depreciation increases with the time. Hence, it ends up lowering the compensation paid by your insurance company. A zero-depreciation plan overcomes such limitation of a standard comprehensive policy thereby enhancing the compensation paid for the repairs.
How does a comprehensive policy scale differently from a zero-depreciation plan?
The following pointers define how a zero-depreciation cover in addition to comprehensive plan is different from a standard comprehensive coverage.
- Coverage for spares: The insurance terms does not consider the effect of depreciation on metal, plastic, fibre and glass parts whereas the same is considered in a standard policy.
- Premium amount: The car insurance prices for a policy with zero-depreciation cover are higher for the increased coverage offered under the plan.
- Claim settlement: Theclaim amount for a zero-depreciation cover is higher as depreciation does not end up reducing the compensation offered by the insurance company.
- Cost of repairs: The repairs required for plastic spares are covered in a zero-depreciation plan as compared to a standard car insurance cover.
- Limitation in coverage: Zero-depreciation covers are available only for cars which are up to three or five years old based on the policy terms. On the contrary, a comprehensive plan is available for the entire life of the car.
* Standard T&C Apply
What are the benefits of buying a plan with zero-depreciation cover?
A zero-depreciation cover offers an additional financial cushion, even more offered by a comprehensive insurance plan. Here are some of the noteworthy benefits of why you must buy a zero-depreciation cover and ensure its consistent car insurance renewal.
1. Broader financial coverage
The first real advantage of buying a nil-depreciation add-on is the financial coverage it offers. A policy with zero-depreciation cover not only extends its benefits to cover own-damages to you car along with personal accident cover and third-party cover, but also eliminate the effect of depreciation when calculating compensation.
2. Higher amount of claim settlement
While the depreciation is not accounted when compensating the insured vehicle, the claim paid by the insurance company is higher in comparison to a standard comprehensive cover. *
3. Effective management of policy
While the cost of a zero-depreciation cover isn’t much compared to the benefit it offers, you can include it in your policy of softening the financial blow of accidents and damages. *
* Standard T&C Apply
With the above-mentioned benefits, it is best recommended to invest in a zero-depreciation plan if your vehicle is new and falls within the policy terms that offers coverage for it. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.