Here are Six common misconceptions about zero depreciation car insurance

While purchasing a comprehensive car insurance policy or an OD insurance policy, car owners often opt for zero depreciation add-on coverage. This add-on coverage helps you receive the actual value of your car while claiming settlement without deducting the depreciation value of a vehicle.


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However, policyholders often get misguided due to some prevalent myths or rather misconceptions about this zero-depreciation cover. This article’s section will inform us about misconceptions about zero depreciation vehicle insurance.

Six common misconceptions about zero depreciation car insurance 

Every mechanical component wears out over time, and so does the car. Consequently, its monetary value depreciates over time. Buying zero-dep car insurance can cover one against the depreciation value. However, here are six misconceptions regarding a zero-dep policy that you must remember while opting for this insurance policy:

  1. It covers the cost of the deductible

Zero-dep insurance will not cover the compulsory deductibles included in the car insurance policy. As a policyholder, one must take care of this pre-decided deductible amount during the claim. Thus, the zero-dep add-on cover is not liable to cover this cost.

  1. Buying zero depreciation cover for old cars is easy

Maximum insurers do not provide zero depreciation cover for four-wheelers above five years of age. Hence, purchasing a zero-dep cover can be extremely troublesome if an individual’s car is six years or older. So, those planning to buy this add-on for their old car need to make sure that the car is below five years old. Nil depreciation car insurance is ideal for new cars.

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  1. It covers the consumable cost

Consumable costs include the price of nuts and bolts, engine oil, clutch oil, coolant, etc., during a repair. The zero-dep add-on does not cover such costs. However, these costs are only covered if one purchases a consumable cover add-on while opting for a comprehensive or OD car insurance policy.

  1. One-time claim only

The number of claims a policyholder can make throughout the policy plan may have some limitations. Generally, a policyholder can claim this coverage twice during the entire period depending on the insurer’s specifications. However, there can be some changes in this rule in future, and thus, it is advisable to learn the policy plans carefully before purchasing an insurance cover.

  1. Not applicable for two-wheelers

Both car owners and bike owners are eligible to purchase a zero-depreciation cover. Bike owners can opt for this add-on cover while renewing or purchasing a comprehensive insurance policy for their two-wheelers.

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  1. No exclusions 

Every insurance policy comes with some exclusions, and zero depreciation car insurance also comes under this category. For example, a zero-dep policy will not cover your vehicle if it gets damaged due to a technical breakdown. Moreover, it does not cover regular wear and tear.

Sometimes the car may get damaged due to water ingestion or oil and fluid leakages. This add-on will not cover such damages and defects. In addition, components such as gas kits and bi-fuel kits are often left uninsured. Therefore, any damage caused to these uninsured car components does not count under a zero-depreciation cover.

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Car insurance policy with & without zero depreciation policy

Opting for a zero-depreciation car insurance policy allows a car owner to get a higher claim amount during the claim settlement procedure. However, a car insurance policy without a zero depreciation cover will make the insurer consider the depreciation charge while paying the compensation.

Though the premium of a standard policy is much more affordable compared to one with the zero depreciation cover, the benefit received in a zero-dep policy is much higher.

Now that car owners are aware of the misconceptions and benefits of a zero-depreciation car insurance policy, those planning to purchase a comprehensive or OD car insurance policy, can check out the add-on coverage offered by the insurance provider and choose the add-ons as per their requirement.

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