73052 34433
Customer Self ServicesBuy/Renew Zero Depreciation Car Insurance Online | Chola MS
What is Zero Depreciation Car Insurance?
Zero depreciation car insurance, also known as Nil Depreciation Cover offers complete cover without factoring in the depreciation. Thus if your car is damaged in a collision you will receive the entire cost from the insurer during claim settlement. This add-on is only made available to cars aged 5 years or less . It serves as a good option to avoid paying high costs at the time of claim settlement, especially if your car is in the right age bracket.
Benefits of Zero Depreciation Car Insurance
- Referred to as Bumper to Bumper Cover, zero depreciation insurance offers 100% coverage for all rubber, fibre, and metal parts without deduction of depreciation
- Provides compensation for financial burden of damages/losses incurred due to accidents and is essential for both amateur and professional drivers looking to protect their newly purchased cars
- Broadens the cover of basic car insurance by settling repair/replacement expenses of insured parts without considering the depreciation
Role of Zero Depreciation Car Insurance during Claim Settlement
As per the Insurance Regulatory and Development Authority of India (IRDAI) depreciation rates for various car parts are as follows:
| Parts | Depreciation Rate |
|---|---|
| Rubber, nylon, plastic parts, and batteries | 50% |
| Fiberglass components | 30% |
| Wooden parts | 1st year - 5%,2nd year - 10% and so on |
Thus if you have a basic car insurance policy, the insurer will only reimburse the depreciated value of the replaced car parts, irrespective of the actual cost. In case of zero depreciation cover the aforementioned rates will not affect your claim settlement.
Zero Depreciation Car Insurance vs Comprehensive Car Insurance
It is important to know what differentiates Zero Depreciation Car Insurance Cover from Comprehensive Car Insurance Cover to arrive at the right decision for your situation.
| Basis | Zero Depreciation Car Insurance | Comprehensive Car Insurance |
|---|---|---|
| Car’s Age | Covers cars aged 5 years or less | Covers cars older than 5 years but less than 15 years |
| Premium Rate | Relatively High | Relatively Low |
| Claim Settlement | Offers full settlement coverage and depreciation will not make a dent | Claim amount is based on the current value of the vehicle, which factors in depreciation |
| Repair cost plastic fiber | Insurer bears the cost | Insured has to shell out money |
Who should Buy Zero Depreciation Car Insurance Cover?
Zero Depreciation Car Insurance is highly recommended for people with cars aged 5 years or less to protect their vehicle from potential threats and damages. However, this cover is especially important for the following categories of people:
- Those who have purchased a new car because your vehicle will start depreciating after 6 months and even a slight bump may send your car to the garage. It is recommended you get this cover along with the policy to protect your newly purchased car.
- If you are a new, inexperienced driver and more likely to damage your vehicle, this cover will help you recover the damages through the claim.
- Those who own high-end, luxury cars with expensive spare parts should consider buying this add-on because in the event of an accident, the damage will be relatively higher and cost proportionately a lot more.
What does your Zero depriciation car insurance policy give you?
- Theft of your car.
- Damage to your car due to natural calamities namely earthquake, landslide, floods etc. and man-made disasters such as riots, terrorism, vandalism etc.
- Damage to your car due to an accident.
- Damage to your car due to fire or explosion.
he following events and situations are not covered under this policy -
Car Insurance Frequently asked questions
All you want to know about Motor Insurance at Chola MS
"The main difference between the two is that zero depreciation cover promises full settlement cover. A standard comprehensive cover computes the cover based on the current market price of your car. If you have damaged your car in an accident, a standard policy will pay for the repairs after considering the depreciation. In zero depreciation policy, your insurer pays the full claim without factoring the depreciation.
Usually only new cars can avail the zero depreciation add-on. Insurance companies have a specific age limit when it comes to zero depreciation. If your car is older than the specified limit, then you won’t be eligible to buy zero depreciation add-on cover for your car.
A zero depreciation cover is beneficial for a new car but it restricts the number of claims you can make annually.
- Age of the car
- Model of the car
- The location in which you are based
Zero depreciation cover offers complete coverage without factoring in depreciation. It means, if your bike gets damaged following a collision, you will receive the entire cost from the insurer when filing a claim
- This add-on does not cover normal wear and tear or mechanical breakdown of your car
- It provides cover for expenses incurred for damage to tyres, batteries, car paint, rubber and plastic parts and so on
- This add-on is only valid up to 2 times in a policy period