Zero Depreciation Add-On Cover
Zero depreciation is a kind of additional coverage that is available to car owners at a supplementary premium rate. This is not usually included as part of the regular car insurance plans.
Essentially, when insurance companies deal with a claim, they apply a depreciation rate in order to arrive at the payable amount. Whatever is the difference in worth between the market cost of the required part and the depreciated part is to be taken care of by the owner of the automobile.
Now, with a zero depreciation add-on, the insuring company will be responsible for covering the full price of the part that is needed. For somebody who wants a hassle-free claims process – zero depreciation is one of the most valuable car insurance plans. It is an important add-on if you are a new car owner. This is obviously dependent on your ability to pay a higher premium for this add-on.
Usually, the depreciation rate considered by companies differs with different insurers. Yet, there are some standards according to which this rate is calculated. For example, a few car parts depreciate at a faster rate than others. So the depreciation tends to be more with such parts. Similarly, depreciation rates are calculated for different automobile parts in all car insurance plans. Usually, parts made out of materials such as rubber, plastic and the battery depreciate at a quick pace. Auto-parts such as fiber glass depreciate at a much slower pace.
Zero depreciation is a great add-on as it is a good plan to stop depreciation factor related money loss at times of insurance claim. Regular comprehensive car insurance plans do not take into account damages to parts made of glass, nylon, plastic, fiber etc. This special ass-on other hands will take care of all these parts and any claim that arises for them. The best part about this add-on is the peace of mind that comes free with it, especially for a new car owner.
Other Things to Know
Most car insurance plans only cover new automobile under the zero depreciation add-on. If the automobile you own is older than the insurer’s limit, then there is a fair chance that you will not be able to avail this add-on.
There is a certain kind of fee known as Compulsory Excess that is part of this add-on. Under this, the insured party with zero depreciation add-on needs to make a payment for a compulsory policy excess. This is as the coverage may not always be all-encompassing as some insurers may not cover regular wear and tear of the car.
A detriment with this addon is that there may be a limit to the number of insurance claims that you can file in one calendar year.
Your car is a machine that is susceptible to all kinds of damage, human or natural. A regular car insurance is a great choice but consider a zero depreciation add-on to be even safer. Care for your vehicle as you should by picking the right car insurance plans.