Cars are no longer a luxury but a part of your daily life. Be it a commute to work or for a family outing, it helps travel comfortably without worrying about transportation facilities. In addition to registration and PUC certificate requirements, you must also have a car insurance policy. This insurance cover helps safeguard against financial losses from a collision or an accident.
Car insurance is available in two types – a third-party policy or a comprehensive cover. As the name suggests, a third-party plan only covers legal liabilities payable to a third person. With such a limited scope for third-party cover, a comprehensive is the choice of many since it also offers coverage for damages to your car. However, one limitation of a comprehensive plan is that it does not consider time and thus lowers the compensation at the time of claim. This is due to depreciation and is a result of time.
Like all types of machinery wear out over time, your car is also prone to depreciation. This depreciation percentage depends on the time passed, thus lowering the claim paid after each passing year. This impact of depreciation can be avoided using a depreciation shield. Let’s learn more about it.
How do you shield your car against depreciation?
Depreciation lowers the amount of pay-out to your comprehensive insurance policy. However, with the help of add-ons, this impact of depreciation can be avoided. Add-ons are additional features available as an optional upgrade to your comprehensive cover. Since it is an optional feature, it impacts . With a zero depreciation cover, you can ensure maximum payout for the cost of repairs for your car. Using such an additional facility eliminates the impact of any depreciation on your vehicle.
Important pointers about zero depreciation cover
These are some pointers you need to know when buying a zero-depreciation add-on.
- This add-on is known as nil depreciation cover or bumper-to-bumper insurance. The terminologies are interchangeable based on the insurance company.
- Since it is an additional feature available voluntarily, it increases your policy’s premiums. Despite its costs, its benefits are more and thus buying one is worthwhile.
- Insurance companies may limit how often a claim can be raised under this add-on. It would be best to clarify this beforehand during purchase or .
- The coverage of the zero-deprecation policy is limited to a car that is not older than five years.
Who should consider buying one?
Since it increases the claim pay-out of your policy, this add-on is suitable for not one but many different types of drivers. For instance, you own a luxury car, and any damage can burn a hole in your wallet. At such times, a zero-depreciation plan ensures the maximum coverage for these damages. Next, new or inexperienced drivers must invest in this policy since accidents are bound to happen when learning to drive a car.
These are some advantages of a zero-depreciation cover that shields your car against the impact of depreciation. Not only does it help to enhance the policy scope, but it also lowers the out-of-pocket expenses since most of it is covered by the insurance cover. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.