Zero Depreciation” Cover: Is it really worth it for you?

“Zero Depreciation” Cover: Is it really worth it for you?
When you buy car insurance, you often get the option to choose from a number of add-on covers. One of the most popular and frequently recommended covers is the “Zero Depreciation” cover. It is also sometimes called “bumper to bumper” cover. But is it really worth it for you? Let’s understand this in detail.
What is “Zero Depreciation” Cover?
The value of any car keeps on decreasing over time, which is called ‘depreciation’. When you make a claim for your car, the insurance company usually pays only after depreciating the parts. This means that you do not get the full cost of repairs.
“Zero Depreciation” cover solves this problem. With this cover, the insurance company does not pay for the replacement or replacement of the car parts after an accident. Provides full repair cost (without deducting depreciation). This includes plastic, fibreglass, metal and rubber parts, but usually excludes consumables such as tyres, battery and engine oil (unless you have a consumables cover).

Benefits of “Zero Depreciation”:

Lower Out-of-Pocket Expense: This is the biggest benefit. If your car suffers major damage, the repair bill is significantly lower as the insurance company does not deduct depreciation. You only have to pay the deductible amount.

Peace of Mind: Especially for owners of new cars or expensive cars, this cover gives peace of mind. You do not have to worry that you will have to pay a lot of money out of your pocket at the time of a big claim.

No treatment like an old car: No matter how old your car is (some companies have a limit of up to 5 years), depreciation is not deducted for new parts at the time of claim Disadvantages of “Zero Depreciation”:

Higher Premium: Choosing a zero depreciation cover can increase your insurance premium by 10% to 25%.

Limited Claims: Most insurance companies limit the number of claims in a year under zero depreciation cover (often to 2 claims). If you make more claims than this, normal depreciation rules apply after that.

Age Limit: This cover is usually not available for cars older than 5 years. Some companies may keep this limit lower.

Only with Comprehensive Policy: You can buy zero depreciation cover only with a comprehensive or package policy, not with third-party insurance.

When is it beneficial for you?

• New car owners: If you have recently purchased a new car If you have a zero depreciation cover, then zero depreciation cover can be very beneficial.

• Expensive car owners: Owners of luxury cars or cars whose spare parts are expensive, this cover is a must.

• Lack of driving experience: If you are a new driver or live in a place where accidents are more likely, then this cover can be good for you.

• Frequent minor damages: If your car often suffers minor damages (like scratches on the bumper), then this cover can save you from frequent small expenses.

Conclusion:

“Zero depreciation” cover is definitely a valuable add-on, especially if you want peace of mind and less out-of-pocket expenses at the time of a big claim. However, it should be chosen based on your needs, the age of the car and your driving habits. If you are driving an old car or you drive very carefully and do not make claims, then the increased premium may not be right for you. Always evaluate your need and budget and then Decide if this cover is ‘worth the cost’ for you.