4 factors to Know about Zero Depreciation Insurance for Car
You may have heard about zero depreciation when discussing car insurance. It is an additional benefit available to the car owners by paying a slightly higher premium. In standard car insurance policies, zero depreciation is excluded.
When you file a claim, the insurance company applies a certain rate of depreciation to determine the settlement amount. The depreciation charges are to be borne by you.
However, when you avail of zero depreciation car insurance, the entire cost is covered by the insurer subject to applicable excess/deductibles.. It is recommended you include this feature if you are buying a new car to enjoy the added benefit.
Before you buy, take a look at these five things that you should know about zero depreciation insurance for the car.
1. Available for cars up to five years old
Most insurers offer this feature only for cars that are not older than five years. There is a certain age limit applicable and if your car is older, then this feature may not be available. In most cases, the additional cover is not available for vehicles that are older than five years.
2. Compulsory excess
It is important to remember that the coverage is not always available for 100 percent. you need to pay compulsory excess levied by the insurance company.
3. Number of claims restrictions
A zero depreciation car insurance cover may often limit the number of claims you may file during the year under the policy. This varies from one insurance company to another and you must check this before making the purchase.
4. Higher premium
Generally, the insurance premium on a zero depreciation policy is higher. This is because unlike comprehensive coverage, such policies offer full coverage without considering any depreciation.
Benefits of zero depreciation motor insurance
Varied benefits of this feature are as follows:
Though you may have to pay a little higher premium, the savings in case of repairs after an accident may often mitigate this additional cost.
You enjoy complete peace of mind knowing that you will not face any financial difficulties in case your car is damaged and requires repair.
if you own a vehicle, procuring additional coverage is advisable.