How Zero Depreciation Claims Differ for Minor vs Major Accidents?

Summary/TL;DR

Zero depreciation claims are different for minor and major accidents based on the frequency of claims, NCB loss, extent of damage and more. Depending on the type of accident you’ve been in, make sure to file the claim to weigh in the benefits and file the claim to avoid significant financial loss.

Introduction

Zero depreciation cover will eliminate depreciation deductions for all replaced parts in the event of an accident. However, the benefit of it can vary depending on how severe the accident is. Offering coverage for different parts, getting this add-on can be extremely beneficial.

Claim coverage varies significantly between minor and major accidents. For minor accidents, this add-on can help lower the cost of replacing parts such as bumpers and mirrors. As for major accidents, it offers higher financial coverage. This article explores the claims difference for minor and major accidents for zero depreciation car insurance.

What is Covered Under Zero Depreciation?

Zero depreciation cover protects the car by waiving off depreciation on replaced parts during claim settlement. Here's what's covered under zero depreciation:

• Fiberglass parts
• Metal parts like doors, fenders, bonnets and more.
• Applicable for replaced parts of the damage is covered under Own Damage Sections like natural calamities or riots.
• Plastic, rubber, and nylon parts, such as interior panels, clips, trims, and bumpers.

How Will Zero Depreciation Cover Help for Accidents?

Zero depreciation car insurance cover offers significant benefits to car owners in the event of major or minor accidents. In the event of an accident, it reduces out-of-pocket expenses by ensuring depreciation is not applied to the replaced parts during claim settlement. In minor and major accidents, parts replacement is a common scenario. Having this coverage offers peace of mind, as you'll be protected against the risk.

1. Minor Accidents

Minor accidents usually involve minor damage, such as cracked bumpers, broken fixtures, and damaged side mirrors. For city drivers, these minor accidents are likely to occur frequently. You may want to file a claim for the repairs during the policy year, but be extra mindful of the scenario.

Read More on:How to File Car Insurance Claims Online (Step by Step).

2. Frequency of Claims

You can apply for only one to two zero-depreciation claims on your car insurance per policy year. After this, the depreciation will be applied as per standard policy.

3. Insights Into Depreciation

For a standard car insurance policy, the insurance company can depreciate plastic and fibre parts up to 50%. With the zero-dep cover, the deduction is waived, and the insurer will bear the full cost.

4. Consumables Not Covered

Even with a zero depreciation add-on, some consumables are not covered. These include

nuts, bolts, grease, lubricants, engine oil and cleaning agents.

5. Impact on NCB

Filing a zero depreciation claim for a minor accident, too, can reset your accumulated No Claim Bonus if you do not have an NCB add-on. Always weigh the benefits of your accumulated NCB against the claim amount before filing the claim.

Pro tip: Before filing any claim for minor damages, compare the estimated cost of repair to the accumulated NCB benefits during renewal to determine financial feasibility.

6. Major Accidents

Major accidents result in extensive structural damage to your car and require multiple parts to be replaced. It involves high repair costs, but with zero depreciation, it can significantly reduce the financial burden.

7. Maximum financial protection

Several parts may need to be replaced in the event of major accidents. For the standard policy, depreciation deductions will be applied depending on vehicle age and part type.

• With zero depreciation cover
• Depreciation on replaced parts will be waived.
• Out-of-pocket expenses will be significantly reduced.
• The insurer will cover the cost of replaced parts without depreciation deductions according to policy terms and conditions.

8. No engine coverage

If the engine parts were replaced due to accidental damage,Zero dep insurance will waive the depreciation on those parts. However, this will not cover consequential engine damage due to hydrostatic shock or water ingress. For this, you must have an Engine Protection add-on.

Read More on:How Engine Protection Cover Saves You from Costly Repairs During Monsoons.

9. Impact of RTI

If the vehicle has been declared a constructive total loss, a zero depreciation waiver will not apply. Therefore, you will need theReturn to Invoice add-on.

With the Return to Invoice add-on:

• Thecar insurance company will compensate the car's original value, not its depreciated Insured Declared Value.
• It is essential for the initial few years if the market depreciation is steep.

Here's a basic comparison regarding Zero Depreciation for minor and major accidents:

What are the Limitations of Zero Depreciation Cover?

The common limitations applied by thecar insurance on zero depreciation cover include:

1. Things not covered:

Regular wear and tear, electrical failures and mechanical breakdown are excluded under the base motor policy. The zero depreciation cover also does not override these exclusions. Claims will also be rejected in case of policy breach. Zero depreciation does not apply to total loss or theft claims; the settlement is based on Insured Declared Value (IDV).

• Higher Premiums:

Zero depreciation cover offers added protection against the risk. The increased insurer risk also raises premiums.

2. Vehicle Age Restriction:

Zero-depreciation cover is usually valid for cars up to 5 years old. For cars older than that, there are specific restrictions that everyone must know about.

3. Cap on Number of Claims:

You can apply up to 2 claims per year on your car insurance policy. Therefore, before filing the claim, you will have to be extremely careful regarding what is being offered.

4. Partial and Non-Coverage of Certain Parts:

The add-on coverage has restrictions on coverage for certain parts. For example, non-metal and non-plastic parts may not be completely covered. Even non-factory-fitted accessories are not covered by the add-on.

How is the Rate of Depreciation Calculated?

The rate of depreciation in car insurance is calculated using the IRDAI depreciation grid:

• Metal parts: as per the age slab
• Plastic, rubber and nylon parts: Flat 50%

Read More on:How Zero Depreciation Car Insurance Works

What happens if only repainting is required after the accident?

If only repainting is required, the car insurance company will provide limited zero-depreciation coverage. It will involve paint material and labour costs. It will not cover consumables and deductibles.

If a major accident occurs, which parts would be covered by the zero-depreciation insurance?

If a major accident occurs, zero dep insurance will offer coverage for rubber, plastic, nylon, and metal parts. As a result, it offers comprehensive protection. It will not cover engine damage due to oil leakage.

Expert Note

This information is based on standard motor insurance guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) and commonly followed industry practices. Policy coverage and conditions may vary by insurer.