Car repairs can be expensive, especially when you least expect them. That is why choosing the right insurance add-ons can make all the difference. One such add-on that is becoming increasingly popular is the zero depreciation car insurance among car owners.
It ensures that when your car is damaged, you get the entire claim amount without deductions for depreciation on parts. In simple terms, it keeps you from paying out of pocket for the “age” of the vehicle. Let us break down how it really works and why it is worth considering.
Understanding Depreciation in Car Insurance
When you buy a car insurance policy, it is important to know how depreciation affects claim settlement. Depreciation refers to the gradual decrease in your car’s value over time. Every part, from the bumper to the battery, loses value as your car ages.
For instance, if your car’s bumper costs ₹10,000 to replace and the depreciation rate is 40%, a standard policy will only cover ₹6,000. You will have to pay the remaining ₹4,000 from your own pocket. That is how regular insurance works. It accounts for the reduced value of parts before reimbursing you.
How Zero Depreciation Car Insurance Works?
Zero depreciation is an add-on cover that eliminates the depreciation deduction during claim settlement. That means if your car is involved in an accident and parts need to be replaced, your insurer will pay for the full cost of these parts, ignoring their depreciated value.
It is especially useful during accidents, minor collisions or when you are replacing parts like bumpers, doors or headlights. With this add-on, you can enjoy higher claim payouts and lower personal expenses during repairs.
Real World Example: Standard vs Zero Depreciation Claim
Suppose your car needs repairs worth ₹50,000 after an accident. Under a regular policy, you might only get ₹35,000–₹38,000 because of depreciation deductions on plastic and metal parts.
With a zero depreciation add-on, however, you would receive the full ₹50,000, minus only the standard deductible. This means no loss in value due to age.
Key Benefits of Zero Depreciation Cover
Higher Claim Amount: You get the full amount for replaced parts without depreciation cuts.
Reduced Out-of-Pocket Expenses: You won’t need to pay extra for most part replacements.
Ideal for a New or Expensive Vehicle: Newer vehicles or premium models benefit the most.
When to Buy a Zero Depreciation Cover?
A zero depreciation add-on is ideal if:
- Your car is less than five years old.
- You often drive in traffic-prone or accident-prone areas.
- You want full coverage and minimal repair costs.
While the premium for this cover is slightly higher, the savings during claims often outweigh the extra cost, especially for newer cars.
Conclusion
In short, zero depreciation car insurance is a smart way to keep your repair costs low and your protection high. It ensures you get the full value of your claim, helping you maintain financial strain.
When you are buying or renewing your policy, take a moment to consider this add-on. It is a small investment that can save you a lot in the long run. With insurers like TATA AIG, you can easily add zero depreciation cover to your car insurance policy online and drive worry-free, knowing your car is protected against both accidents and depreciation.
