Why Should You Equip Your Car With a Zero Depreciation Cover?
People who own a car might be well aware of the term ‘Depreciation’ under car insurance. For those who have no knowledge about the same, it is the loss in value of a particular asset due to various factors like wear and tear, age, etc. Vehicles as well are depreciating assets. In simple words, if you go to purchase a brand new car, it will cost you more than an older one. Car is made up of materials like metal, glass, plastic, etc. and there is a specific depreciation associated with all of these materials, each one having a different rate of depreciation.
Accidents can happen anytime and anywhere, and if your car gets damaged, it can be difficult for you to recover the expenses incurred on replacing the parts. During the car insurance claim process, you will receive coverage for the replaced parts only after the depreciation amount is deducted, by the insurance company. You are supposed to pay the difference between the market value of the new part and the depreciated car part.
A great solution to your problem would be to purchase a zero depreciation cover for your car, so you can avail maximum reimbursement at the time of claim.
About Zero Depreciation Car Insurance Cover
You can choose the Zero Depreciation Add-On Cover and protect your car against any kind of physical damage caused to it, excluding the element of depreciation. Your basic insurance policy will surely protect you against losses that arise due to car damage or in case of theft, on filing a claim. However, the compensation that you will receive will be after a standard deduction of depreciation.
If you have car insurance with zero depreciation cover, you can fetch your entire amount of compensation. You can avail of this particular add-on cover for brand new cars. Or if you haven’t already bought it, you can do so during car insurance renewal.
Under the zero depreciation car insurance policy, your car insurance company pays the claim amount, without taking into consideration the depreciation value. You indeed must pay a little high premium to avail the cover, but it is better that you invest in one. It reduces the possibility of any out-of-pocket expenses, which gives you more reason to purchase it.
Following are the benefits you can enjoy with a Zero Depreciation add-on cover:
- Your claims concerning the insured parts are settled by your insurer without considering the depreciation amount.
- As the depreciation cost is not considered while filing claim settlement, out-of-pocket expenses are curbed.
- The value of your basic car insurance coverage increases, making your investment almost nil.
- If you have this cover, you will be guaranteed to have peace of mind.
However, there are certain factors to be considered before you opt for a zero depreciation add-on cover:
- Model of your car
- Age of your car
- Your exact location
People mostly believe that those who have purchased a new car or have less experience in driving a car, need to buy a zero depreciation cover because they are at higher risk of getting their car damaged. However, one cannot trust it blindly, as we have seen cases of the most experienced drivers getting involved in road accidents due to their fault or the other driver’s. Therefore, it is always better to remain safe and always aware of the motor insurance claim process.
I am Daisy Bell and a pro-level blogger with years of experience in writing for multiple industries. I have extensive knowledge of Food, Fitness, Healthcare, business, fashion, and many other popular niches. I have post graduated in arts and have a keen interest in traveling.