What is zero dep insurance exclusion coverage?
- Driving without a valid licence
- Driving under the influence of alcohol or drugs
- Normal wear and tear
- Mechanical or engine breakdowns
- Total loss of the car (when the repair cost equals or exceeds the Insured Declared Value)
How Does Zero Depreciation Cover Work in Car Insurance Claim Settlement?
Let’s consider two examples to understand what zero dep insurance means in the settlement process.
Example 1: With Zero Dep Car Insurance
Rohit’s car gets into an accident, and the total repair cost is ₹50,000. With zero depreciation cover, the insurer covers the entire amount. Rohit pays nothing out of pocket except the compulsory deductibles.
Example 2: Without Zero Dep Car Insurance
In the same scenario, without zero depreciation cover, the insurer considers the depreciation of parts. Let’s assume a 20% depreciation on parts worth ₹30,000. Rohit would receive ₹44,000 (₹50,000 - ₹6,000 depreciation), and he would have to pay the remaining ₹6,000 from his pocket.
What are the Factors Affecting Your Zero Depreciation Car Insurance Premium?
Here are some factors that affect the premium of car insurance online:
- Car’s Age: Newer cars have lower premiums for zero depreciation cover.
- Make and Model: Luxury or high-end cars might attract higher premiums.
- Claim History: A history of multiple claims can increase the premium.
- Geographical Location: Areas with higher traffic or accident rates can result in higher premiums.
Priya now understands what zero depreciation car insurance means. She is considering buying the add-on for her car. Thus, she can secure her investment by choosing zero depreciation cover and ensure peace of mind.