Zero Depreciation Add On Cover in Motor Insurance
Want to get Full Insurance – Full claim amount for your Motor Vehicle? – Consider opting Zero Dep Add On. If you are worried about paying the part payment amount for the motor claim then you should consider buying the Motor Add On, which takes care of your out of pocket expenses. In a comprehensive motor insurance cover, you would not get the full claim amount as there as some repair components which attract deprecation charges for replacing the damaged parts/oils with a new pair of parts/ fluid. Also, items like body painting and rubber parts attract depreciation. Under Own Damage (OD) cover of your motor insurance policy, there is compulsory deduction of a minimal amount towards repairs.
Your basic comprehensive motor insurance policy provides coverage for Own Damage, Third Party & Personal Accident cover for owner driver which would compensate the Vehicle owner for any damages and total loss of Vehicle arising out of accident or theft. However, repair components which are considered for depreciation charges for replacement are not considered in your base comprehensive motor insurance policy.
Such charges won’t be covered in your Motor Insurance Policy unless you have opted for an add-on motor cover called Zero depreciation cover. Zero depreciation Add On is also popularly known as Nil depreciation cover or Depreciation waiver cover, which helps to preserve value of your vehicle without considering any depreciation. It provides a complete cover to your vehicle without factoring age related or damage caused depreciation on the value of parts replaced.
Coverage: This cover extends the repairing costs of your vehicle which includes Painting, Rubber part replacement, Glass or Fiber replacement. This add on cover is provided usually to the new cars generally up to 5 years of age and comes after paying extra premium along with Motor Insurance Policy.
This Add On offers a complete protection where your motor claim is settled without considering the depreciation factors. Insurer Company bears the maximum cost in case of damage to the vehicle whereas standard motor insurance cover policy holder has to pay part of the claim out of his pocket. In standard policy with Zero dep Add On, the claim is settled based on the current value of the vehicle whereas in Zero Dep cover the claim is settled for entire amount. This add-on cover eliminates the possibility of any out-of-pocket expense adding value to your motor insurance cover.
Different between Standard motor cover & Zero dep Add on:
Each of the materials or parts of your vehicle has a different rate of depreciation which is considered for claim settlement. If you have only standard motor cover, rate of depreciation will range from 0% to 40%. Further rate of depreciation also factors age of vehicle and the type of material. With Zero depreciation cover, no any depreciation is charged and hence 100% reimbursement on replaced or depreciated parts is provided.
Vehicle owners who should consider buying Zero dep Add On:
All vehicle owners should consider buying zero depreciation cover as it adds high value to the Motor Insurance Cover. This Add on cover should be consider for purchase especially by new car owners who are frequently worried about bumps & dents during there early days of driving. Vehicle drivers who are exposed for driving in accident prone areas & owners of premium & luxury cars should consider buying Zero Depreciation cover.
Factors to be known before purchasing the Zero Dep cover:
Age of the vehicle, make and model of the vehicle and the location where the vehicle is to be driven are the major factors to be known before you think to opt this Add On along with your Motor Insurance Policy. It is not advisable to opt for this cover for high aged vehicles.
Cost of Add On cover:
This Add On cover comes with slightly higher cost. Premium is approximately 15 to 20% extra as compared to standard motor cover. There is a restriction on limit on the number of claims to be made under this cover. Also it is to be remembered that Zero Depreciation does not cover damages caused to the Engine that requires repairs or replacement.
Thus, this add-on cover is important these days as it provides high advantages considering the fact that it eliminates the possibility of any out-of-pocket expenses which you may have had to pay for replacing parts of your car. It adds more value to the basic motor insurance cover.
IC 72 MOTOR INSURANCE EXAM
IC – S01 Principles and Practice of Insurance and Survey & Loss Assessment: IC – S01