Buying a new car can be an exciting. The test-drives you get to experience and then finally coming to terms to select your favourite car among the lot. But it isn’t done when you finalise your car. Registration and insurance are compliances that need to be met. While the registration is managed by your vehicle dealer, car insurance is in your control. Selecting a car insurance policy offered by your dealer can be one alternative, but it may not always make the cut. At times, it may not be even the right fit for you. Thus, comparing various policies is necessary before finalising any.
When you buy car insurance, online or offline, there are essentially two types of plans to choose from—a third-party cover or a comprehensive coverage. The former policy is the bare minimum but lack sufficient protection for you brand new car. Hence, most buyers opt for a comprehensive policy. A comprehensive policy offers advantage of own-damage cover alongside the mandatory third-party coverage. Also, the damages that may be sustained due to natural disaster and man-made perils are also insured under this. Moreover, a comprehensive policy allows for customising your insurance cover with the help of add-on facility. * Standard T&C Apply
Add-ons are optional policy features that extend the scope of your policy and offer broader coverage for various perils. One such add-on is the zero-depreciation cover. Like all machineries and equipment are subject to deterioration due to time, cars are likewise impacted due to it. Thus, whenever a claim is raised, the insurance company pays the compensation after considering the impact of such depreciation on the car. This, in effect, lowers the compensation that is paid.
To circumvent this, you can buy car insurance online with a zero-depreciation cover. What is does, basically, eliminates any effect of depreciation that will impact the pay-out at the time of claim. Hence, the insurer no longer considers the depreciation factor on your car when paying for the claim raised. Popularly, zero-depreciation cover is also known as nil depreciation plan and is often offered as a bundled feature with comprehensive policies. * Standard T&C Apply
Not considering depreciation in your insurance claim has the effect of lowering the out-of-pocket expenses in addition to enhancing the insurance pay-out. Thus, you will be required to pay for the deductibles in your policy while the majority of the expenses are covered under the insurance scope.
You must also note that every spare isn’t covered under this add-on. Consumable spare like batteries, tyres, and those accessories that aren’t part of the standard product are outside the purview of this coverage. Additionally, breakdowns due to wear and tear are also not covered. Since the insurance cover is an add-on, each insurance has different terms and you must read the fine print to understand what is included and excluded from this policy.
Moreover, the zero-depreciation add-on being an additional feature impacts your premium pushing it even higher than your comprehensive policy. You can make use of a car insurance premium calculator to know its impact on the premium. A zero-depreciation policy is best suited for new cars that aren’t older than 5 years. But, the terms of certain insurance companies may differ.
So, to protect your brand-new car, it is advisable to buy a nil depreciation add-on with your comprehensive policy. Also, make sure to buy at ever car insurance renewal online that helps to ensure continued coverage. Lastly, do keep in mind that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.