Feel good after buying a new car? This can be your new car and newer for a long time if you buy a zero depreciation car insurance. There is a misconception among people that zero depreciation car insurance is a waste of money after buying a car.
People most often buy car insurance because of fear of the law. As you deal with a dealer to buy a car, the other dealers also know the value of the car. You can do the same while buying insurance for the car.
You only need a little bit of information for this. Let us explain how you can buy a good policy. Car insurer companies are also involved in the policies. Let us tell you some essential things related to zero depreciation car insurance.
Source :- tomorrowmakers . com
WHAT IS A ZERO DEPRECIATION CAR INSURANCE?
If your car’s insurance is going to lapse, then you can think of buying a zero depreciation car insurance. Now you must be thinking what zero depreciation insurance means?
Insurance companies reduce the value of the car each year after the renewal of the policy. In the world of insurance, it has been named depreciation.
Under this policy, depreciation is not included in the value of the car. If this causes damage to your car due to an accident or other reason, then the insurance company pays the full amount of the claim.
Insurance companies believe that the price of the car is fixed after one year. Insurance companies decide the different value of the car for each Year. When the owner of the car is claiming a loss in the car, the team reduces the value of the car due to the company’s depreciation.
To avoid high-cost payment at the time of settlement or repair, people generally choose the option for Zero Depreciation Car Insurance Plan.
Source :- myinsurancebazaar . com
ADD-ON OF ZERO DEPRECIATION CAR INSURANCE
Learn about the importance of add-on in zero depreciation car insurance here:
All insurance companies provide zero depreciation add-ons. You can buy it while taking a motor insurance policy. If your vehicle accident occurs, it forces the insurance company to repay the entire amount of repair and replacement of the add-on parts.
This add-on has a special price. So, if you are planning to have zero depreciation car insurance after 3 years then “YES” you can do that as some insurance policies have this facility. But if you do not possess a luxury car then do not extend zero depreciation car insurance after 3 years. It will not worth your money.
However, if you are planning to have zero depreciation car insurance after 5 years then it is a big NO-NO. Zero depreciation car insurance after 5 years is impossible.
Zero depreciation car insurance after 3 years is POSSIBLE but not worthy if you do not possess a luxury car and zero depreciation car insurance after 5 years is IMPOSSIBLE.
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WHY PEOPLE BUY ZERO DEPRECIATION CAR INSURANCE?
The price of most machines decreases over time. Not only the total cost of the car decrease, but the price of some parts also decreases. This is the reason that the Indian Insurance Regulatory and Development Authority (IRDA) has set some guidelines related to depreciation, which are followed by all insurance companies.
Some people believe that losses from depreciation can be dealt with by buying a Comprehensive Insurance Policy. But this is not at all. However, the Comprehensive Plan is beneficial for us.
Source :- policybazaar . com
WHAT ARE THE COVERAGE OF ZERO DEPRECIATION CAR INSURANCE?
Zero Depreciation Cover, also called ‘zero-depart’ policy, provides full coverage without factoring in depreciation. This means, if your car gets damaged after the collision, then you will get the full cost from the insurer.
- In the event of theft, zero depreciation benefits will not be found. It will be paid on IDV basis.
- Zero depreciation car insurance is given for vehicles under 2 years. Generally, this add-on is not given for vehicles older than 3 years. However, some insurance companies offer zero depreciation car insurance after 3 years. But zero depreciation car insurance after 5 years is quite impossible.
- If the damages arise due to non-listed reasons in the On Dame, the claim will not be accepted for it.
- There are no minor breaks like Damage covers. You have to repair them yourself.
Before you make a payment, read the policy documents carefully and understand it.
WHAT IS THE RATES OD DEPRECIATION?
Here is the rate of depreciation you can get depending on your vehicle’s age.
|Age Of The Car||Depreciation Rate|
|Up to 6 months||05%|
|More than 6 months but not more than 1 year||15%|
|More than 1 year but not more than 2 years||20%|
|More than 2 years but not more than 3 years||30%|
|More than 3 years but not more than 4 years||40%|
|More than 4 years but not more than 5 years||50%|