A car insurance policy is a mandatory requirement as per the traffic laws of India. If you have a car to your name, you should also have a valid car insurance policy on it as specified in the Motor Vehicles Act, 1988. Thus, you need to buy a car insurance policy for your car.
When it comes to buying a car insurance policy, the law only requires valid third party liability coverage. This coverage covers the financial liability that you suffer if you hurt an individual physically or if you damage someone’s property. A third party policy does not cover the damages suffered by your car itself. Though the policy fulfils the legal requirement, it does not cover car-related damages. That is why a comprehensive policy makes more sense for covering your car completely.
A comprehensive car insurance policy is one which covers the third party liability as well as the damages suffered by the car itself. The policy, therefore, provides a wider scope of coverage compared to third party plans. Moreover, under comprehensive car insurance plans, there are many optional coverage benefits, called add-ons, which are available. These add-ons help in enhancing the coverage further. One such add-on is the zero depreciation add-on which is quite popular. When you opt for this add-on in your comprehensive car insurance policy, the policy becomes a zero depreciation car insurance plan or a bumper to bumper insurance policy.
A zero depreciation car insurance plan is a comprehensive car insurance policy having the zero depreciation add-on added to it. This policy does not reduce the claim amount because of the depreciation of the car’s parts. In case of a claim, the full cost of the parts repaired or replaced is paid by the policy. A zero depreciation policy, therefore, pays a comprehensive claim in case of damages suffered by your car.
Under normal comprehensive car insurance plans, the normal wear and tear of the parts of the car which occur due to usage are not covered. As such, when the parts are damaged and a claim occurs, the insurance company deducts the applicable depreciation from the actual value of the parts of the car. When depreciation is deducted, a lower amount of claim is paid. However, when the damaged parts are repaired or replaced, the full cost of such parts is incurred. Since depreciation has been deducted from the claim, you face the responsibility of paying for the excess cost.
The rate of depreciation which is deducted by the insurance company is fixed by the Insurance Regulatory and Development Authority of India (IRDAI). The rates are different for the different parts of the car and are as follows –
|Types of car’s parts||Depreciation applicable|
|Rubber, plastic or nylon parts||50%|
|Tyres and tubes||50%|
|Metal parts||As per the depreciation of the Insured Declared Value of the car|
So, if the fibreglass parts of the car are damaged and you incur a cost of INR 10,000 in repairs, a normal car insurance policy would pay only INR 7000 in the claim as INR 3000 would be deducted towards depreciation.
A zero depreciation cover comes in handy in this case. As per the terms of the cover, the depreciation suffered by the car’s parts would also be covered. Thus, at the time of a claim, the deduction for applicable depreciation is not done. The insurance company pays the full cost of repairing or replacing the damaged part of the car. In the above example, even if the applicable depreciation on the fibreglass parts is INR 3000, the insurance company would pay the full cost of INR 10,000 as claim if you have bought the zero depreciation cover.
A zero depreciation car insurance policy is suitable in the following instances –
A zero depreciation policy is very useful because of the following benefits that it offers –
Under zero depreciation policies, the following types of claims are covered –
Though a zero depreciation policy provides an all-inclusive scope of coverage, there are few instances of claims which the policy would not cover. These include the following –
Before you opt for a zero depreciation car insurance policy for your car, here are some pointers which you should keep in mind –
You can get a zero depreciation cover for your car by opting for a comprehensive car insurance plan and then adding the zero depreciation add-on to the coverage. To buy the policy you can choose the online medium and buy through Turtlemint. Turtlemint lets you compare the best zero depreciation policies offered by leading car insurance companies. You can compare the available plans and choose one which has the best coverage at the lowest premiums. The way to buy zero depreciation cover through Turtlemint is as follows –
Car insurance policies need to be renewed at regular intervals so that you can enjoy uninterrupted coverage. To renew you can renew the policy from the website of the company whose policy you have bought. Alternatively, if you have bought the policy from Turtlemint you can renew the plan from Turtlemint’s platform itself. Just log into your Turtlemint account, choose the policy and click on ‘Renew’. Pay the renewal premium and the policy would be renewed instantly.
A zero depreciation policy is an exhaustive coverage for your car. If you don’t want to pay for the high repair costs yourself buy a zero depreciation policy and get maximum coverage for your car.
The premium for zero depreciation add-on is not fixed. It depends on the insurance company. Every company charges a different premium for the add-on. You should, therefore, compare the rates of the cover and then choose one.