Car Insurance Depreciation Shield Cover 2019-2020

What Is The Car Insurance Depreciation Shield Cover?

The government of India has made Car Insurance mandatory in India. Yet, people around the country carry fake insurance papers to fool the authority. What they don't realize is that it causes them more harm than anyone else. Buying a valid Car Insurance policy is as important as fastening your seat belt.

Car Insurance Coverage

  • Your Car Insurance will shield you against loss or damage that occur due to natural calamities like floods, earthquakes, landslides, lightning, fires, and hurricane. Many Indians live in regions that are prone to catastrophic natural events.
  • It will protect your car against theft or damage arising from malicious human actions.
  • You don't have to worry about any third-party legal liabilities due to your third-party Car Insurance.
  • Repair costs and parts replacement expenses will be covered by your comprehensive policy.
  • Coverage can be obtained for your co-passengers also - an excellent way to protect your near and dear ones.

Zero Depreciation Cover

It's crucial for customers to know that their general Car Insurance will not provide full reimbursements. For example, if the repair costs of your Car is Rs.1 lakh, then your normal Car Insurance will only provide Rs.70, 000 and the remaining difference of Rs.30, 000 should be paid out of your pocket.

If you want to avoid shelling out extra money at all costs, then zero depreciation cover is the right selection for you. Opting for this cover would provide you with reimbursement, which doesn't factor in your depreciating car value, thereby greatly reducing your financial burden. So basically, a zero depreciation cover will help you shield yourself from paying high costs during claim settlement.

There are a variety of Car Insurance policies available for customers in India with zero depreciation cover being one of them. Let's consider the difference between the standard Insurance policy and zero depreciation cover in the following table.

ParametersRegular Health InsuranceStandard Car Insurance
Claim settlementFull claim settlement through a hassle-free processThe insurance Claim amount is determined by the current market value of your car, which factors in depreciation
Repairing costs and plastic fiberYour insurance company will bear most of the cost under the zero depreciation cover.You will have to bear the cost
You would have to pay for any non-payable components.
Age of the carGenerally covers only new carsCan be taken for a car that is more than 3 years old

Important Factors to be considered before Choosing this Plan

The premium for a Car Insurance policy with zero depreciation cover will be higher than standard policies. This is because it's a comprehensive policy that does not factor in depreciation.
Regarding the zero depreciation cover, there is an upper limit to the number of claims a customer can file per year. This is done to discourage policyholders from making claims for minor issues. Make sure to inquire about the number of claims provided by your insurer along with the maximum claim amount.

Zero depreciation cover - in most cases - is only available for new cars. This is because paying a high premium for a car that's 5 plus years old just doesn't make any sense.

A new car is eligible to receive 100% replacement cost for the first year only. Keeping this in mind, car owners should consider opting for a zero depreciation cover policy from the 2nd year. Make sure that your Car Insurance coverage is extensive so that you can avail a maximum number of benefits.

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