While getting an insurance policy for vehicles, the car owner is liable to bear the depreciation value of the car or its body parts at the time of claim settlement. However, by paying an extra premium amount the policyholder can get the benefit of claiming the full amount from the insurance company for damages that are excluded from a basic car insurance policy. Zero depreciation car insurance cover works by eliminating the cost of repair or replacement of car parts without considering the depreciated value.

The premium for zero depreciation car insurance is determined based on specific factors such as the age of the car, the model of the car, and the location on which the policy buyer is based. Here, the policyholder can apply for a claim twice during the policy tenure and this policy applies only to vehicles that are less than five years old. Zero debt cover is thus also called nil depreciation cover /bumper to bumper cover.

Benefits of Zero Depreciation Car Insurance Cover

1. Increase in compensation: Generally, at the time of claim settlement, the insurance company reduces the depreciation amount applicable on the car and its body parts which is determined by the policy’s IDV. With the Zero debt add-on cover, you can receive a higher claim amount eliminating the depreciation rate of the car.
2. Cuts down expenses: The policyholder can save money in the long run and avoid paying out-of-pocket at the time of the accident and damages to the car and its body parts as the depreciation is not considered during the claim settlement.

Who should purchase a Zero debt insurance cover?

• New & Luxury car owners: If you have recently purchased a car or if you own a car that has expensive body parts of the car then this add-on cover is for you. You can avoid bearing huge expenses and get the depreciation amount claimed as well at the time of accidents or any damage.
• Car owners in accident-prone areas: Damages to the car can be inevitable in accident-prone areas. Thus, having zero-debt car insurance can be beneficial in claiming a considerable amount with this nil depreciation add-on cover.
• New drivers and regular car owners: Drivers who have just begun to drive and also regular car owners both can avoid out-of-pocket expenses for repairing the car and its parts during any collision. Thus, they can be at peace of mind by claiming the full amount at the time of claim settlement.

Things to keep in mind about zero-debt insurance cover:

• Zero depreciation cover, nil depreciation cover, bumper to bumper all the three are the same and offer the same coverage.
• There is a limit on the number of claims you can propose to the insurance company during a year.
• Zero-debt car insurance is available only for cars that are less than five years old
•  Maximum coverage is provided in zero depreciation insurance cover which covers the cost of plastic parts and all repair costs.
• Zero depreciation car insurance will be a little expensive in terms of premium when compared to a regular car insurance policy. If your car is more than 3 years old, it is not advisable to opt for zero depreciation car insurance. However, if your own a luxury car and if the repair cost is high then you can consider opting for this particular cover depending on the age of the car, model of the car, and your location.