Are you looking for insurance for your car? Then, you have come to the right place. At Tata AIG, we have an excellent selection of car insurance plans for you to choose from, along with feature-laden add-on covers, including our Zero Depreciation Cover.
You can get up to 80 per cent discounts if you buy Tata AIG online car insurance. Go to our website now and get your Tata AIG Insurance Quote Online.
What is Zero Depreciation Car Insurance?
Zero Depreciation is a car insurance add-on cover that negates the impact of depreciation in your car insurance policy. Usually, if your car gets damaged, the car insurance claim amount that you can receive accounts for the depreciation accumulated on the car due to age and usage.
However, with a Zero Depreciation Cover, you can receive the entire value of your car’s components during a car insurance claim without any deductions for depreciation. Therefore, adding a Zero Depreciation Cover enhances the coverage of your car insurance plan and increases the financial protection for your vehicle.
In a Zero Depreciation Cover, Zero Depreciation means that there is no effect of depreciation on your car insurance plan. Therefore, buying Zero Depreciation Car Insurance is a beneficial decision. Out of the car insurance companies in India selling zero depreciation car insurance in India, Tata AIG is an excellent choice, particularly with our long history of high-quality customer service delivery.
What is Depreciation?
Depreciation is the reduction in the value of an asset. In the context of car insurance, depreciation is the consistent decline in the value of your car’s components as a result of age, usage, normal wear and tear, etc. Therefore, the depreciation accumulated on your car is directly proportional to its age.
The depreciation rate for all vehicles in India is decided by the norms determined and released by the Insurance Regulatory and Development Authority of India (IRDAI). Here is a table displaying the depreciation that gets accumulated on your car every year.
| The Age of Your Car | Percentage of Depreciation |
|---|---|
| 0 to 6 months | 5% |
| 6 months to 1 year | 15% |
| 1 year to 2 years | 20% |
| 2 years to 3 years | 30% |
| 3 years to 4 years | 40% |
| 4 years to 5 years | 50% |
If you have a Zero Depreciation Cover, you can claim the entire amount of the damaged components of your car in your car insurance claim, which essentially means that there is zero depreciation or nil depreciation in your car, at least as far as its insurance plan is concerned.
Who Should Opt For A Zero Depreciation Car Insurance Add-on Cover?
If you wish to have complete insurance coverage for your car, you must opt for zero depreciation car insurance. Whether you are a new car owner, a veteran car owner, or a sports car enthusiast, adding a zero depreciation cover to your car insurance plan can spare you from having to bear the burden of the depreciation of the car’s parts, particularly in the form of a reduced car insurance claim payout.
Here is the list of people who should opt for Zero Depreciation Car Insurance.
1. New Car Owners: If you have recently purchased a new car and are considering different car insurance policies for it, you must add a zero depreciation add-on cover to the plan you select. By doing so, you can get extensive insurance coverage for your car.
2. Sports Car Owners: Owning a sports car comes with a fair amount of thrill and pride. However, since the prices of such cars are high, their components are costly too and often difficult to repair and/or replace. Therefore, it is advisable for sports car owners to buy zero dep car insurance.
3. Luxury Car Owners: If you own a luxury car, the cost of repair of its components could leave your pockets considerably lighter, even with a good car insurance plan. This is why you must not think twice before opting for a zero depreciation cover for your luxury car.
Benefits Of A Zero Depreciation Car Insurance Add-on Cover
There are several benefits of a Zero Depreciation Car Insurance Add-on Cover:
1. Increase in Coverage: Adding a zero depreciation cover to your car insurance plan leads to an enhancement in the overall coverage you have for your precious four-wheeler. This way, you do not need to worry about the high cost of the repairs of various car parts and the reduction of your car insurance claim amount.
2. Higher Car Insurance Claim Amount: By adding a zero depreciation car cover to your car insurance policy, you can claim the total repair/replacement cost of the various insured parts of your car. And since the amount of depreciation will not weigh the amount of claim down, you benefit from a higher car insurance claim amount.
3. Lower Out-of-pocket Expenses: Even if you have a comprehensive car insurance plan, the amount of car insurance claim that you receive may not be sufficient to meet the expenses incurred in the repair or replacement of the car’s components. This is because of the depreciation accumulated on your car reducing its Insured Declared Value and, in turn, the claim amount. However, with a zero depreciation cover, you do not have to worry about the depreciation of your car’s components.
4. Nominal Additional Cost: A Zero Depreciation Cover adds only a nominal additional cost to your car insurance plan but adds substantial benefits to your car insurance coverage.
5. Peace of Mind: The knowledge that your car is completely financially secure against any damages, including depreciation, can enable you to have peace of mind with regard to your driving companion. And you can attain that knowledge by buying a zero depreciation car insurance cover.
How is Depreciation Calculated?
If you are wondering how the depreciation on the various parts of your car is calculated, the following table can answer your queries:
| Car Components | Rate of Depreciation |
|---|---|
| Rubber, Plastic, and Nylon Parts; Batteries | 50% |
| Fibre Parts | 30% |
| Wooden Parts | 5% in the first year and 10% in the second year |
The periodical depreciation on your car can be computed by using the below table:
| The Age of Your Car | Percentage of Depreciation |
|---|---|
| 0 to 6 months | 5% |
| 6 months to 1 year | 15% |
| 1 year to 2 years | 20% |
| 2 years to 3 years | 30% |
| 3 years to 4 years | 40% |
| 4 years to 5 years | 50% |
If you do not have a zero depreciation cover, your car insurance claim amount will be determined after the deduction of the depreciation accumulated on your car’s components. This could mean that a significant proportion of the repair/replacement expenses may have to be borne by you.
Therefore, it is advisable to opt for a zero depreciation add-on with your car insurance policy. You can add the zero depreciation add-on to your Tata AIG car insurance policy online and calculate the premium amount using our car insurance premium calculator. Having a comprehensive car insurance policy and a zero dep cover means extensive financial protection for your car.
Factors To Consider Before Opting For A Zero Depreciation Car Insurance Add-on Cover
Before opting for a zero depreciation cover for your car, you must keep certain important factors in mind.
1. The age of your car:You can buy a zero depreciation cover for your car only if it is not older than five years. Therefore, if you have a car that is more than five years old, you cannot get zero depreciation car insurance for it.
2. The cost of zero depreciation car insurance: Since a zero depreciation insurance cover adds to the layers of protection available to your car, it carries a certain additional cost. This cost, in turn, increases your total car insurance premium.
3. The coverage of zero depreciation insurance: Zero Depreciation Car Insurance does not entail zero depreciation for all the car compo. Some parts are excluded from the coverage of this add-on, including the parts made from glass. Furthermore, the damage to some other car parts is not calculated by 100 per cent deduction of depreciation but certain specified percentages instead. Therefore, you must check the coverage of a zero depreciation cover before buying it.
4. The limit on the number of claims: There is a ceiling on the number of claims you can file against your zero depreciation car insurance cover. You can file a maximum of two claims against this cover across the tenure of your car insurance policy.
What Is Not Covered Under A Zero Depreciation Car Insurance Add-on Cover?
It is important to know what is not covered under your zero depreciation cover. Here are the major exclusions from your zero depreciation car insurance policy:
1. Damages to your car whilst caused by driving under the influence: If your car gets damaged as a result of driving under the influence of narcotics or alcohol, any car insurance claim filed to recover the cost of the required repairs is not valid. This is because driving under the influence is not covered by any car insurance plan.
2. The claims following the second claim in the policy term:The zero depreciation cover in your car insurance policy is only valid for the first two claims filed during the tenure of said plan. Any subsequent claims filed against this cover shall not be valid, at least as far as the Zero depreciation aspect is concerned.
3. Damages sustained by your car due to a use not intended for it: If a car intended for private use is damaged whilst being used for a commercial purpose, any car insurance claims filed for said damages are not valid. And this applies to your zero depreciation cover as well.
You must check the policy wordings of your zero depreciation cover to have clarity on the full list of inclusions and exclusions in the plan.
Factors Affecting Zero Depreciation Car Insurance Premium
Several factors have a bearing on your zero depreciation car insurance premium, including:
1. How old your car is: The vehicle depreciation rate is directly proportional to the vehicle’s age. This is why the age of your car has a significant bearing on the amount of depreciation accumulated on it, which, in turn, helps determine how much premium you need to shell out for your zero depreciation cover.
2. What the make and model of your car are: The make and model of your car are instrumental in the determination of its Insured Declared Value. The higher the IDV of your car, the higher is your car insurance premium and the premium of your zero depreciation car insurance cover.
3. Where you drive the car: The geographical location where you usually drive your car is an important factor in the calculation of your car insurance premium. If you live in a place with a low incidence of traffic, your car insurance premium and the premium for your zero depreciation cover are likely to be lower than for someone who lives in a high-traffic area.
Differences Between A Zero Depreciation Car Insurance Add-on Cover And A Comprehensive Car Insurance Policy
There are several differences between a comprehensive car insurance plan and a zero depreciation car insurance cover. The table below offers a succinct summary of these differences.
By selecting our Comprehensive Car Insurance Policy and adding a Zero Depreciation Cover to it, you can secure extensive financial protection for your car.
| Criterion | Zero Depreciation Car Insurance Cover | Comprehensive Car Insurance Policy |
|---|---|---|
| Nature | A Zero Depreciation Car Insurance cover is available in the form of an add-on cover | A Comprehensive Car Insurance Policy is available in the form of a standalone car insurance policy. |
| Coverage | A Zero Depreciation Cover provides you with the benefit of the negation of the depreciation accumulated on your car, in addition to the benefits of your base car insurance plan. | A Comprehensive Car Insurance Policy offers extensive coverage to your car, including the damages caused by accidents, fire, transit, and natural and man-made disasters. Furthermore, it comprises a cover for the total loss event such as theft or irreparable damage to your car. You can add several add-ons to this car insurance plan. |
| Depreciation | If you choose this cover, you can claim and receive the entirety of the claim amount for the repair or replacement of your car’s parts. | If you choose this policy, you can have extensive coverage for your car. This plan also includes a Personal Accident Cover of ₹15 lakhs for the Owner-Driver of the insured vehicle. However, under this plan, any car insurance claim takes into account the depreciation accumulated on your car. |
| Premium | Your car insurance premium will increase if you add this cover to your base car insurance policy. | The car insurance premium for a comprehensive car insurance policy will be lower before the inclusion of a zero depreciation cover. |
| Eligibility | Cars which are less than five years old are eligible for this cover. | All cars, irrespective of their age, are eligible for this policy. |
| Purchase | A Zero Depreciation Car Insurance Cover is available to be purchased as an additional cover to a Standalone Own Damage Car Insurance Policy and a Comprehensive Car Insurance Policy. You cannot buy this cover as a standalone plan. | A Comprehensive Car Insurance Policy is available to be purchased as a standalone plan. |
| Number of claims permissible | You can file two claims against your Zero Depreciation Cover during your car insurance policy’s tenure. | You can file as many claims as you want against your Comprehensive Car Insurance Policy during its tenure. |
Why Should You Opt For A Zero Depreciation Car Insurance Add-on Cover?
If you are still on the fence about opting for a zero depreciation cover, the following reasons may convince you:
1. It Provides Your Car With Higher Insurance Coverage: By choosing a zero depreciation cover, you can get a high degree of protection for your car. If you opt for a comprehensive car insurance policy, you can benefit from extensive coverage. However, the car insurance claim amount that you will get will have a deduction for depreciation. Therefore, you must compliment your comprehensive car insurance policy with a zero depreciation car insurance cover.
2. It Nullifies The Effect Of Depreciation On Your Car Insurance Claim: If you select a zero depreciation or nil depreciation cover, you effectively nullify the effect of depreciation on your car insurance policy and claims. This way, you can claim the entire amount of the repair/replacement expenses for the damages caused to your car without any deductions for the accumulated depreciation.
3. It Reduces Your Total Expenditure For Car Repairs: The cost of repairing or replacing the components of your car can be quite high. Since your car insurance partner will only provide the claim amount after accounting for depreciation, you may have to bear a substantial part of the expenses from your own pockets. Therefore, it is advisable to opt for zero depreciation car insurance.
Frequently Asked Questions About Zero Depreciation Car Insurance Add-on Cover
Can You Transfer A Zero Depreciation Car Insurance Add-on Cover To Another Car Owner?
Yes, a Zero Depreciation Car Insurance Add-on Cover can be transferred to the new owner of a second-hand car. When you transfer the car insurance plan for a second-hand car from yourself to its new owner, you simultaneously also transfer its zero depreciation cover. This facility makes the sale and purchase of second-hand vehicles and the transfer of car insurance easier and user-friendly.
Is A Zero Depreciation Cover Worth It?
Since a zero depreciation cover enhances the insurance coverage of your car and the financial protection available to you with regard to your car, it is absolutely worth every penny of the additional premium you pay for it. With a nil depreciation cover, you can claim the entire amount of the expenses incurred in the repair or replacement of the components of your car without any deductions for the depreciation amount.
You must purchase zero depreciation car insurance if you are:
- A new car owner
- A sports car owner
- A luxury car owner
- A resident of an area that is prone to accidents
Is a Zero Depreciation Cover Applicable Only For New Cars?
A zero depreciation cover is applicable for cars that are less than five years old. Therefore, whether your car is a new one or an old one, you can get a zero depreciation car insurance cover for it as long as the age of the car is not in excess of five years. You can add this cover to your Standalone Own Damage Car Insurance Plan or Comprehensive Car Insurance Policy at the time of the purchase or renewal of your car insurance plan.
How Many Times Can Zero Depreciation Car Insurance Be Claimed?
You can claim zero depreciation car insurance a maximum of two times during the tenure of your car insurance plan. The third zero depreciation claim shall not be entertained.
How Is The Zero Depreciation Or Nil Depreciation Cover Different From A Comprehensive Car Insurance Policy?
There are several differences between a nil depreciation cover or a zero depreciation cover and a comprehensive car insurance policy. Firstly, the former is an add-on cover, whereas the latter is a standalone car insurance plan. Secondly, a comprehensive car insurance policy does not allow you to claim the entire amount of the expenses incurred for the repair or replacement of your car’s parts. However, with a zero depreciation cover, you can claim the entire amount without accounting for the depreciation accumulated on the relevant car parts.
Is Zero Depreciation Better Than Comprehensive Car Insurance Policy?
A Zero Depreciation Cover is neither better nor worse than a Comprehensive Car Insurance Policy. Both are different in nature, coverage, and prices. A zero depreciation car insurance cover is an add-on cover, whereas a comprehensive car insurance policy is a standalone car insurance plan. Furthermore, the price of the former is lower than the latter.
With a zero depreciation cover, you can claim the total amount of your car repair/replacement expenses without any deductions for depreciation. On the other hand, this benefit is not available with a comprehensive car insurance policy unless you add zero depreciation car insurance to it. Zero Depreciation in car insurance is, thus, a win-win situation.
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