Are Zero-Depreciation Car Insurance Policies Worth It?

Still, confused between Comprehensive and Zero Depreciation Car Insurance? Read this five-minute article to decide as to which two insurances’ would be better.

If you are a frequent Coverfox visitor, by now you must have mastered the details of car insurance in India.

Are Zero-Depreciation Car Insurance Policies Worth It?

There's no doubt how essential comprehensive car insurance is in India. When contemplating buying a new car for your family and fulfilling your dream, it's always preferable to provide adequate protection to you, your vehicle and fellow riders with comprehensive car insurance.

More often than not, new buyers tend to get overburdened with information at the time of purchase and end up making a bad choice. And for some, it is still a matter of confusion to fully grasp the concept of zero depreciation cover. Zero depreciation insurance is slightly different from comprehensive car insurance. After this 5 minute read, you will be able to decide if you want to opt for zero depreciation.

Deciding on Your Car Insurance

When buying a new car, car insurance is not on the consideration list of the buyer. The result is that the buyer puts himself, the third-party and his newly bought car at risk, in case an accident occurs. Car insurance becomes essential as it not only provides you with a monetary claim in case of a casualty, but also provides various other features like add-ons, 24x7 towing support, third-party protection and much more. Moreover, having car insurance is mandatory under the Indian Law.

Sometimes, the car dealer assists you in buying a “free insurance'' which later proves out to be completely ineffective and puts you in a tough spot. Hence, it is always recommended to buy car insurance online from a trusted agent or a reliable insurance platform. With Coverfox, you can cut out on the agent costs.

Difference Between the Two Types of Policies

The primary difference between a zero depreciation cover and a comprehensive car insurance is the consideration of depreciation at the time of claim.

When it comes to comprehensive insurance, the policyholder is reimbursed the amount calculated by a complex calculation that takes into account the car's depreciated value. A Zero-Depreciation insurance or zero depreciation cover on the other hand, will compensate the covered vehicle for the entire cost of repair, regardless of its age or current value.

At the same time, it must be noted that zero depreciation cover comes at a higher premium which can raise your car insurance premium by up to 20%.

When is it Ideal to Purchase a Zero Depreciation Cover?

Zero Depreciation Cover or Zero Depreciation insurance can help you save a significant amount on repairs and replacement of expensive parts of your car. It is very helpful in the following cases:

  • If you want to cover your luxury car's parts. The parts of luxury cars are highly expensive and prone to higher depreciation.
  • If you live in a dangerous or accident prone area. It may include areas amidst mountains, near the sea or areas of snowfall where the chances of occasional repair may be higher.
  • If you like to keep your car completely dent free and prefer maintaining it to the best of condition, zero depreciation can prove advantageous.
  • If you are a new driver or have brought a new car, zero depreciation can be a good option.

Pros and Cons of Zero Depreciation Policy

The primary benefits of zero depreciation car insurance include:

  • Full reimbursement of cost of repairs at the time of claim settlement
  • Ideal for new cars
  • Gives peace of mind and hassle-free claim settlement
  • No last minute surprises from the insurance company

However, the zero depreciation comes with following limitations:

  • Higher Premium amount
  • Only available for new cars upto 3 years
  • Limited number of claims

If you still have queries to be resolved, feel free to contact our customer care service and we would be happy to assist you.

Also Read: Car Insurance Rates By Age And Gender

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