Given the unwavering protection offered by zero-depreciation car insurance should they make a claim, many policyholders can sense an air of invincibility, knowing that under this coverage, any losses they incur would be recovered, with nothing lost due to depreciation. This is where the Zero Depreciation Car Insurance Plan proves resourceful, since it covers all damage-related costs to rubber, metal, and fiber parts, with no deductions made to account for depreciation.
Zero depreciation added-on cover, sadly, does not extend the cover for cars over the age of 5. In the case of the Zero Depreciation Add-On Cover, the owner of the vehicle is allowed to receive the full value of damaged parts of the vehicle that are replaced, with no amount depreciation subtracted.
With the addition of zero depreciation, when an insurance claim is filed for the damages/losses of the vehicle, the insurer covers the total amount, without taking into consideration/counting vehicle depreciation.
With nil depreciation coverage, you are allowed to claim the full amount of expenses incurred to repair or replace components in your vehicle, with no depreciation amounts being subtracted. When your vehicle is damaged, you are not entitled to 100% reimbursement of expenses incurred in replacing the parts. The common insurer will pay for part replacements only after taking the amount of the depreciation into account.
At the time of an accident, general insurance companies pay for the cost of parts damaged in an accident, after deducting depreciation. Most claims you make for an insured part are settled without taking the amount of the depreciation into account.
At the time of an insurance claim, each insurance company will always calculate and apply a depreciation amount to determine the amount to be paid for settling a claim (concerning the damaged parts of your vehicle). The insured has to pay for the difference between the market value of new parts vs. depreciated parts of the car.
Every car insurance policy accounts for a vehicle’s depreciation, even when a vehicle is just three months old. For example, if a person’s vehicle is damaged in an accident, their insurance company does not subtract any sum out of their compensation due to depreciation.
In the event of an accident, the amount claimed would not factor in the depreciation of the vehicle, thus giving a higher amount as compensation. Although standard car insurance policies protect you from losses that occur if your vehicle is damaged or stolen, the compensation is received after the standard depreciation deduction.
On the other hand, a vehicle insurance policy that has zero depreciation coverage may get you the full compensation amount. A standard comprehensive motor insurance policy covers only the depreciated value of a vehicle, with the policyholder having to cover the difference.
The insurance company gets the extra premium while the insured gets an option to have comprehensive insurance coverage, not having to pay depreciation costs if parts are replaced because of accidents. Taking the Zero Depreciation Add-On cover allows for payment of the full value of parts replaced that are damaged in accidents, without the deduction of the depreciation amount, thus reducing policyholders’ costs if they make a claim.
When included with a comprehensive motor insurance policy, this add-on removes the depreciation element when the settlement of claims is made, allowing you to get the total compensation, not including batteries and tires.
Because a depreciation-free coverage increases the insurance coverage for your vehicle as well as the financial protection you have around your vehicle, it is worth every penny of the extra premium you pay for it. Zero Depreciation essentially means that should your car or bicycle get damaged after an accident, there is no depreciation taken out of your wear-and-tear coverage of any of your vehicle’s body parts.
Premiums paid for insurance are dependent on your car’s Insured Declared Value (IDV), which is the maximum you are allowed to claim if your vehicle is lost or damaged in construction, or in case it is stolen or damaged beyond repair, during your policy term.