7 Common Myths About Zero Depreciation Cover Debunked

What is Zero Depreciation Cover in Car Insurance?

To understand the misconceptions, it is important to first clarify what is Zero Depreciation in Car Insurance?

When paying claims for damaged parts under a standard Car Insurance Policy, insurers deduct depreciation. As a result, the claim payment is less than the actual cost of having the parts replaced. This deduction can be avoided with Zero Depreciation cover, guaranteeing that the insurer pays the entire cost of replacing the part without taking depreciation into account.

Still, there are several misconceptions regarding this cover despite its obvious benefits. Let us debunk the most common ones.

 

Misconception 1: It covers all damages 100%

A frequent assumption is that Zero Depreciation cover means the insurer will pay for all repair costs in full. However, this is not entirely accurate. While the cover removes depreciation deductions on replaced parts, policyholders are still responsible for certain expenses, such as:

• Compulsory deductibles – A fixed amount that policyholders must pay before the insurer settles the claim.

• Consumable items such as coolant, brake fluid, and motor oil (unless covered in a separate consumables add-on).

• Normal wear and tear and mechanical problems are not covered by any typical insurance plan.

Therefore, even if Zero Depreciation coverage improves claim payouts, the policyholder is still not completely exempt from paying for the insurance.

 

Misconception 2: It is expensive

Another commonly held misunderstanding is that insurance costs are greatly increased by Zero Depreciation coverage. In actuality, this add-on's premium is often only 15% to 20% more than that of a typical Comprehensive Insurance Policy.

Think about this situation:

Adding Zero Depreciation Cover to a standard policy that costs ₹10,000 might make it ₹12,000 instead. If a claim is filed and repair expenses reach ₹50,000, this protection may save ₹10,000 or more.

Financially speaking, the advantages of Zero Depreciation coverage are often worth the extra cost, particularly for expensive or newer cars.

 

Misconception 3: It is suitable for all drivers

Although Zero Depreciation coverage is a beneficial add-on, not all car owners will find it advantageous. This cover is especially useful for:

• New car owners – Ensures maximum claim payout.

• Luxury car owners – Reduces high repair and replacement costs.

• Individuals driving in high-traffic areas – More likely to face accidental damages.

On the other hand, if the car is older than five years or its market value is already low, the additional cost of Zero Depreciation Cover may not be justifiable.

 

Misconception 4: It covers regular maintenance

Zero Depreciation coverage does not cover routine maintenance and repair costs like tyre replacement, brake pad wear, and battery replacements. This add-on guarantees that the policyholder does not have to pay depreciation costs on replaced parts and is only applicable to accidental damage claims.

Thus, car owners shouldn't count on Zero Depreciation Cover to serve as a comprehensive maintenance program. Rather, it is a safeguard against deductions associated with depreciation in the course of settling claims.

 

Misconception 5: No exclusions

Some consumers believe that their Car Insurance Policy's Zero Depreciation cover eliminates all exclusions. This isn't the case, though. Some typical exclusions are:

• Electrical or mechanical malfunctions

• Damages brought on by unlawful activity, including speeding or drunk driving

• Normal wear and tear on the car

By being aware of these restrictions, one may avoid having unreasonable expectations about claim approvals.

 

Misconception 6: It is only for new cars

Although it is strongly advised for new cars, Zero Depreciation coverage is not just for them. This add-on is available for cars up to five years old by several insurers. However, the availability could change based on the conditions of the insurer's policy.

Choosing Zero Depreciation coverage might assist owners of relatively new cars in obtaining higher claim settlements and lessen their financial burden in the event of accidental damage.

 

Misconception 7: Multiple claims can be made without restrictions

Some policyholders think that having Zero Depreciation coverage gives them unrestricted access to an infinite number of claims. The majority of insurers, however, have claim limits. Normally, two Zero Depreciation claims are permitted every insurance year.

Subsequent claims will be resolved with depreciation deductions in accordance with ordinary insurance conditions when this maximum is reached. So, even if a Zero Depreciation Cover is quite helpful, you should be aware of the insurer's claim restrictions.

 

Conclusion

Zero Depreciation coverage is a useful add-on that enhances claim settlements by assured reimbursement for damaged auto parts without depreciation deductions. However, before purchasing it, it is crucial to comprehend its costs, restrictions, and limits.

If you're searching for a comprehensive Car Insurance plan with a Zero Depreciation Cover, Shriram Car Insurance is a well-rounded option. Choosing a Shriram Car Insurance Policy assured that your car will be as secure as possible thanks to our affordable pricing, easy claims procedure, and an assortment of add-ons for complete protection. Purchase the right coverage now to avoid major future expenses!

 

FAQs

1. What is the meaning of Zero Depreciation in Car Insurance?

When resolving claims, Zero Depreciation ensures a larger compensation because the insurer does not deduct depreciation on replaced parts.

 

2. What is covered in Zero Depreciation Car Insurance?

There are no depreciation deductions for unintentional damage to car parts under the Zero Depreciation coverage. Importantly, though, it does not include consumables, regular maintenance, or mechanical problems.

 

3. What is nil depreciation without excess meaning?

This means the insurer pays the full cost of damaged parts without applying depreciation and without requiring any excess payment from the policyholder.

 

4. Is Zero Depreciation Cover available for older cars?

Although policy specifics may differ, the majority of insurers provide Zero Depreciation coverage for vehicles up to five years old.

 

5. Does Zero Depreciation cover engine damage?

No, Zero Depreciation does not cover engine damage brought on by water intrusion or oil leaks. In these situations, an engine protection cover add-on is necessary.