Car insurance is mandatory if you are running your car on Indian roads. The Indian government implemented the law motor vehicles act 1988, for all safety purposes. You are required to invest in a policy for fulfilling the mandate. Everyone wants to live a safe and successful life without stress. Complete protection is crucial for your beloved car. Don’t you want to buy the best coverage? Buying a car is already an expensive affair and maintaining it needs a proper amount of money. Moreover, in case of any damage or accidents, you may have to lose more money in repairing process. Your car needs complete coverage with comprehensive car insurance as it covers both own damages as well as third party liability. The insurance company pays for the repair costs, which incurred in an accident if you have a comprehensive plan. It helps to spare the financial burden. However, did you know that the companies only pay for the depreciated value of the car’s parts?
What is Depreciation?
Depreciation is a reduction in the value of assets due to the usage. The regular wear and tear faces by a car say all about its usage. That wear and tear are determined as depreciation. Therefore, at the time of claim insurer deducts depreciation cost of the asset’s value. This is how you get reduced claim so to prevent it you must buy a comprehensive policy. Therefore, a depreciation cover in the insurance policy for the car may prevent you from cost-cutting. It proves very useful in case your car faces damages. We are here to tell you some important thing about zero depreciation cover.
Zero Depreciation Add-On
Add-ons are always there for extra coverage and protection. Zero depreciation Add-On is one of them. It is available with almost all car insurance policies. You can widen the scope of more coverage with comprehensive insurance policy along with depreciation safety. As the insurance company deducts the depreciation from the claim amount, you receive a reduced claim. If you want to nullify the depreciation effect, chose zero depreciation add-on.
How Zero Depreciation Beneficial for us?
Depreciation car insurance cover is applicable if it is shown on your schedule. The insurer pays you the amount of depreciation deducted on the value of parts replaced for own damage claim lodged under section one of the policy. Vehicle’s age should not more than 5 years from the date of purchase or registration; whichever is earlier at the start of the period of insurance. The claims should not more than two during the policy period.
See the following table to understand zero depreciation rate and coverage –
| Age | Premium | Remarks |
| Up to 1 Year | 0.55% | Rate applicable on SI of the Policy |
| Exceeding 1 year but
not exceeding 2 years |
0.55% |
Rate applicable on SI of the Policy |
| Exceeding 2 years but not exceeding 3 years | 0.60% | Rate applicable on SI of the Policy |
| Exceeding 3 year but not exceeding 4 years | 1.50% | Rate applicable on SI of the Policy |
| Exceeding 4 year but not exceeding 5 years | 1.75% | Rate applicable on SI of the Policy |
As per SGI Private Car Add-on – Details with rates & coverages
Final Words, Well adding various add-ons to the car insurance increases its final cost, but it is always best to invest more for overall protection. Therefore, always select the car insurance cover with the depreciation coverage policy. Well, Zero Depreciation is also commonly known as Nil Depreciation in the insurance sector or bumper-to-bumper car insurance. If you have a nil depreciation cover with you, no depreciation is deducted from any of the body parts of the car. The insurer will pay out the entire cost of the body part for replacement. Zero Depreciation car insurance cover is beneficial for those people with a new or luxury car. People living in accident-prone areas as well as if you have a car with expensive body parts. Nil Depreciation add-on enhances the coverage of the basic car insurance policy that reduces expenses to almost zero. As per the prevailing market value, Nil Dep coverage controls expenses incurred due to repair or replacement of insured parts. Therefore, consider nil depreciation as one of the beneficial car insurance add-ons.
