Zero Depreciation Cover for your Car Insurance

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Zero Depreciation Cover for your Car Insurance
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Add-ons provide extra benefits by enhancing the
coverage of your basic car insurance plan. While
a standalone car insurance plan is crucial in
safeguarding your car against unforeseen events,
the add-ons make your policy much more powerful
and comprehensive.  Before you move your new car
out of the showroom, it is mandatory to buy a car
insurance policy involving a third party
liability. But it is recommended to buy a
comprehensive insurance plan to ensure greater
safety. Along with a comprehensive insurance
plan, you can also go opt for multiple add ons
that can prove handy during difficult times. One
such add on for car insurance policy is the zero
depreciation cover. 
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Understanding the Zero Depreciation
Cover   Basically, depreciation is the reduction
in the value or cost of any material or an asset
over a stretch of time. Zero Depreciation cover
or Nil depreciation add on provides complete
coverage without deducting the cost of
depreciation of the vehicle. For example, if your
car gets damaged in an accident, the insurer will
pay you the complete amount of claim without
deducting the cost of worn-out batteries, tires,
or small wear and tears of the car body.   
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Zero or Nil depreciation cover of car insurance
policy provides 100 coverage for all the fiber,
metal, and rubber parts of your car. However, any
damage to the engine caused by oil leakage or
water ingression is not covered under this plan.
A zero depreciation cover can cost you 15 to 20
more than the standard premium rates but it is a
must buy cover for new and luxurious cars. Also,
people driving in the accident-prone zones can
benefit from this cover.   
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Benefits   Loss or damages incurred due to
accidents can be cumbersome. To avoid both
financial and emotional stress it is important to
know the exclusive benefits offered by zero
depreciation cover. Here is a list of benefits of
zero depreciation cover   Reduces the loss of
depreciation amount of the insured car Cost of
repairing any metal, rubber or fiber parts is
compensated without considering the depreciation
value Enhances the strength of coverage of your
fundamental  car insurance policy by reducing the
expenses  Zero depreciation cover is not just
beneficial for amateur drivers but even for the
experienced drivers because eventualities come
without knocking 
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How is zero depreciation beneficial during claim
settlement?   As per the rules of IRDAI
(Insurance Regulatory and Development Authority
of India), a certain percentage of claim has to
be deducted depending upon the damages occurred.
Given below are the details of the deductions
that will be made during claim settlements. On
batteries, nylon, plastic, and rubber parts 50
deduction On fibre or glass parts 30
deduction On wooden parts depending on the age
of the car, 5 in the initial year and 10 in the
next year and so on, will be deducted    If you
register a claim, the insurer will deduct the
respective amount irrespective of the market
price of your car. This can be a huge loss during
claim settlement but, if you have purchased zero
depreciation cover, a possible loss can be
reduced.
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Factors you need to consider while buying
zero/nil depreciation cover   Make sure the age
of your car is less than 3 years Premium rates
are higher than the basic or fundamental  car
insurance policy as the coverage offered under
this add on is also higher Recommended for luxury
car owners   Factors that affect the premium of
nil depreciation cover   There are three
important factors which will affect the premium
rates of the add on   Age of your car  Model of
your car The location where you(owner) are based
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Who can purchase zero depreciation
cover?   Owners of new car Owners of luxurious
cars Amateur drivers Drivers driving in the
accident-prone areas Cars with high-cost spare
parts If you worry about small wear and tears in
your car   Buying a car insurance policy with
adequate add-ons is a smart way of protecting
your expensive or high-end cars. After
understanding the needs and benefits of zero
depreciation cover you will be able to make a
better decision regarding the add-on. So go
ahead, safeguard your car and yourself from the
perils of eventualities, by buying an adequate
insurance plan with essential add-ons.   
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