Everything You Need to Know About Zero Depreciation Car Insurance

It’s a known fact that car is a depreciating assent. With every passing year, the value of your car depreciates. And due to this depreciation factor, you would not receive the total cost of the damages caused to your car. This is when having a zero depreciation cover can help by negating the value of depreciation. A zero dep cover can be bought with comprehensive car insurance policy and is also known as bumper to bumper or nil deprecation cover.

Read below in detail about everything that you need to know about enhancing your cars coverage with a zero depreciation cover.

What is zero depreciation car insurance?

In simple terms, depreciation means that value of your car decrease each year. Rate of depreciation for each part of the car is different, taking away a huge chunk of your claim amount.

How is depreciation calculated?

Deprecation of a car is calculated on a yearly basis and changes with every passing year. The below charts explains the rate of depreciation calculated from the year you buy the car.

In case you file a claim with a comprehensive cover, your insurer would reimburse only the depreciated value of the car parts, which can turn out to be really expensive, if you have a brand-new car.

Comparison between zero depreciation cover and comprehensive cover

Understanding how the claim amount will be calculated between zero deprecation and comprehensive car

Benefits of Zero Depreciation Car Insurance

• Damages caused to the car don’t have to be borne by you
• This cover excludes the standard depreciation rates
• Offers you complete coverage

Who Should Opt for Zero Depreciation Cover?

• It is a must for people with luxury or brand new cars
• New and inexperienced drivers should insure their car with this cover
• It is a must for vehicle owners residing in accident-prone areas.
• If you own a car that has expensive square parts

Factors Affecting Zero Depreciation Car Insurance Premium

• Age of the car
• Model of the car
• Your location

Exclusions of Zero Depreciation Cover

• It does not cover costs for accessories that are not a part of standard coverage.
• Damages cause to the car batteries and tyres is not covered
• Damages caused to the car engine due to water ingression or oil leakage
• Mechanical breakdown of the car and costs for consumables and oil change is not covered.

Note: Few insurance companies have a limitation on the number of claims you can make under zero depreciation cover. Always check the policy wordings