When it comes to buying car insurance, zero depreciation insurance is the most misunderstood concept by the insurance buyers. There are numerous misconceptions around zero depreciation car insurance that often discourage vehicle owners from buying this coverage.
If you want to buy four-wheeler insurance with a zero depreciation cover, here are some common misconceptions and facts you must know about. From how much coverage it provides to how much extra cost, we will discuss everything.
What is Zero Depreciation in Car Insurance?
Zero depreciation is one of the most common add-ons for insurance for four-wheelers. It guarantees you receive the full value of replaced parts with no depreciation deduction. It is ideal for preserving the worth of your car because it pays for new parts during a claim without considering their depreciated value over time.
Understanding this feature will help you buy car insurance online and make more informed decisions regarding the essential add-ons.
What are the Myths Related to Zero Depreciation?
Myth 1: It is Too Expensive to Be Worth It
Many insurance seekers believe that zero depreciation car insurance increases the cost of four wheeler insurance by a large margin. However, the cost is not that high. The benefits may outweigh the higher price. Here’s why:
- Less Out-of-Pocket Expense
- More Money Value
- Affordable Options
Myth 2: Zero Depreciation Covers Everything
Zero depreciation cover is often misunderstood as a “complete” policy that covers all expenses during a claim. While it is a valuable add-on, it has specific limits. It ensures that the depreciation of car parts is not deducted during claim settlement, helping you save money during insurance for four wheelers.
What is covered?
- Repair or replacement of car parts without depreciation deduction.
- Parts like fibre, plastic, and rubber.
What is not covered?
- Normal wear and tear.
- Engine damage due to water ingression or oil leakage.
- Compulsory deductibles.
Myth 3: It Is Only for New Cars
A typical zero depreciation misconception is that this advantage is offered on new cars only. That is not entirely true. Many insurance policies offer zero depreciation coverage for new as well as old cars to ensure you get a higher claim amount in cases of damages.
- Available in many policies for vehicles up to 5 years old
- Can be added to both comprehensive and standalone packages
- Reduces repair costs pretty significantly, even for the oldest of cars
- For older cars where cost maintenance is high
The truth is, zero depreciation coverage can be a valuable option, no matter the age of your vehicle.
Myth 4: Claims are Always Fully Reimbursed
The biggest myth about zero depreciation car insurance is that the claim will always be paid in full. Of course, that holds true in many cases, but you should be aware that the claims are always restricted to age and extent of damage for your car.
- Zero Depreciation will cover only those parts which do not have depreciation.
- Labour costs, consumables, and parts such as tyres or batteries may not be fully reimbursed.
- The policy has certain exclusions, such as damage caused by negligence.
Myth 5: Zero Depreciation Insurance is a One-Time Benefit
Many people think that zero depreciation car insurance is only applied once, but that is not the case. With the right car insurance policy, zero depreciation is offered as a yearly benefit, meaning you can enjoy the full coverage during every renewal period.
| Feature | Zero Depreciation Policy | Standard Policy |
| Depreciation on Parts | No depreciation applied | Depreciation applies |
| Coverage on Spare Parts | Full coverage | Partial coverage |
| Benefit Duration | Available every year | Varies with policy terms |
Myth 6: It Eliminates All Out-of-Pocket Expenses
The most common misconception is that zero depreciation car insurance policy removes all out-of-pocket expenses. However, though this policy covers the cost of depreciation of parts, you may still have to pay certain charges like deductibles or for non-accident-related repairs.
| Expense Type | Covered by Zero Depreciation | Out-of-Pocket Costs |
| Depreciation | Yes | No |
| Non-Accident Repairs | No | Yes |
| Deductibles | No | Yes |
Myth 7: Zero Depreciation Doesn’t Help in Third-Party Claims
The most common myth is that zero depreciation car insurance policy does not help with third-party claims. Zero depreciation covers the own damage claims and not third-party liabilities. Note that zero depreciation reduces the depreciation cost on car parts during damage claims, ensuring higher compensation for repairs.
Final Words
Zero depreciation coverage will ensure you get the full value of your car’s parts without considering depreciation. This means you won’t have to pay for a large part of the repair costs out of pocket. Top insurers, such as Tata AIG, offer zero depreciation policies for added peace of mind and coverage.
