Car insurance enters as your savior against uninvited events such as car accidents, damages, bodily injuries etc. allowing you to claim the settlement amount as coverage when any such event appears your way. On the top, opting for a comprehensive plan gives you a feature-packed profile of benefits such as accidental damages, third-party liability along with attractive add-ons. However, this plan does not come adorned with zero depreciation and which you can buy as a cover plan. Welcome to the section where you will know what is zero depreciation cover in car insurance and how it is beneficial for your financial well-being.
What is Zero Depreciation Car Insurance Cover?
The value of your vehicle begins to reduce once it gears up on the road. This value undergoes a gradual decrease with time. It is called Depreciation. The difference between the depreciated value and the purchase value of your vehicle does not get covered by your insurance plan, leaving you to take the cash out of your wallet.
That is where the nil or zero depreciation cover counts as a useful tool. Zero depreciation cover is incorporated as a cover plan to your vehicle insurance which is a life-saver when it comes to paying the higher amount to cover the repair/replacement of your vehicle parts. With this cover, the depreciation gos unconsidered and you become able to claim higher payout for the coverage.
Benefits of Nil/Zero Depreciation Cover
Opting for a zero depreciation insurance cover comes packed with attractive benefits. These advantages eradicate worries that linger on your mind at the time of accident and bring peace. We have collected the major benefits of zero depreciation cover to help you make a better decision in your purchase.
Here are the benefits of Nil/ zero depreciation cover that you must consider when purchasing insurance plan:
- Zero depreciation cover offers higher payout
You just had a car accident and now you need to raise a claim against your insurance policy. Since you did not choose zero depreciation cover at the time of purchase, you will now be eligible for coverage against the repair based on the depreciated value of your vehicle.
This will make you end up with a much lower settlement amount which can go even more down based on the rate of depreciation on different parts of your vehicle. Thus, you will be carrying a payout as little as nothing to back your wallet.
But if you have a zero depreciation cover, you will have a sigh of relief as it will not take depreciation into the inclusion when settling your claim. Therefore, you will have a clear path to a higher payout for the repair/replacement of your vehicle parts.
- It betters your savings
Since zero depreciation cover for your motor insurance takes charge of the higher payouts, you need not worry about the baggage of expenses on your wallet. Given the cover, the insurer will not take the depreciation into account when settling the claim which will eliminate the chances of costing you the payout of repair/replacement of your vehicle parts.
- It is affordable
When you look at such useful and irresistable benefits of depreciation cover which influence your decision-making and hop into a better design of overall plan, the first thought that comes to mind is a demanding premium it will cost.
Well, the answer is: the cost of a nil/zero depreciation add-on cover shouldn’t collapse on your budget. If you are incorporating a zero dep cover in a comprehensive insurance plan, then the car insurance policy should not hurt your financial boundary, depending on factors like location and policy plan.
Now that you know the benefits of Nil depreciation cover, you should be able to tweak the plan of purchasing your vehicle insurance plan. Slow down. Before you jump to the conclusion, you need to know certain factors to consider before buying zero depreciation cover. Let’s move ahead.
Things to Consider When Buying Zero Depreciation Cover
Before you take one last step toward the purchase of zero depreciation cover, you should take a quick check on some factors that can impact the premium of your zero dep plan and the scope of its benefits.
Here are some important things to consider before you buy zero depreciation cover:
- Age of your car
Know that most insurance companies don’t grant zero depreciation cover on cars of more than 3 years of age and the age of your car also impacts the premium rate. Therefore, it is important to get in touch with your insurer and confirm everything with them.
- Model of your car
Just like the age of your vehicle, its model can also impact your reach to zero depreciation cover. Some models do not come under the eligibility criteria to get insured with nil depreciation cover. You should consult it with your insurer before making any decision.
Yes, location is next on this list. It is one of the most important factors to affect your eligibility for zero depreciation cover. In case you are living in an area that is prone to any natural calamity like flood then you are likely to miss out this cover.
Cover it Wisely
Now you know zero depreciation cover and its benefits. It is probably the most preferred cover by vehicle owners which it deserves to be. Why skip it when it brings savings to your home? However, you need to consult the factors mentioned above with your insurer before thumbs up and rest, you know.
Is any question bothering you? Spill it in the comments section.