Zero Depreciation Car Insurance
Overview
If you want to reduce depreciation-related deductions during eligible claims, zero depreciation car insurance can be a useful add-on*. It helps you manage repair expenses more effectively. By minimising depreciation of deductions on covered parts, it can help you receive a better claim amount.
Zero Depreciation Car Insurance
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What is Zero Depreciation Cover?
Under a standard car insurance policy with own damage cover, depreciation is usually deducted from the value of parts replaced after an insured accident. Zero depreciation car insurance is an optional add-on* that helps reduce these depreciation deductions on eligible parts during an approved own damage claim, subject to the policy terms and conditions. You may also come across terms like zero dep insurance or zero dep car insurance. They all refer to the same type of cover.
This add-on* does not increase your policy coverage or cover new types of risks. Instead, it changes how depreciation is applied when an eligible own damage claim is settled, which can help reduce your out-of-pocket repair costs.
Since it is an optional add-on*, zero depreciation car insurance is available at an additional premium and must be included in your policy schedule. It works alongside your own damage cover.
How Depreciation Affects a Claim
The standard policy wording applies different depreciation rates to different materials:
Part Type | Standard Depreciation |
|---|---|
Rubber, nylon and plastic parts; tyres, tubes, batteries and airbags | 50% |
Fibreglass components | 30% |
Glass parts | Nil |
Other parts, including wooden parts | Nil to 50%, based on vehicle age |
For other parts, the standard rate increases with vehicle age:
Vehicle Age | Standard Depreciation |
|---|---|
Up to 6 months | Nil |
More than 6 months to 1 year | 5% |
More than 1 year to 2 years | 10% |
More than 2 years to 3 years | 15% |
More than 3 years to 4 years | 25% |
More than 4 years to 5 years | 35% |
More than 5 years to 10 years | 40% |
More than 10 years | 50% |
Let's understand this with an example.
Suppose an eligible plastic part on your car costs ₹12,000 to replace. Under a standard car insurance policy, if 50% depreciation applies, ₹6,000 would typically be deducted from your claim amount. If you have Zero depreciation car insurance and the claim meets the applicable policy terms and conditions, this depreciation deduction may also be covered, helping reduce your out-of-pocket repair costs.
Differences Between a Zero Depreciation Car Insurance Add-on Cover and a Comprehensive Car Insurance Policy
To know how zero depreciation car insurance differs from a comprehensive car insurance policy, the table below provides a simple side-by-side comparison.
| Criteria | Zero Depreciation Car Insurance Add-on* | Comprehensive Car Insurance Policy |
|---|---|---|
Purpose | Reduces depreciation deductions on eligible parts during approved own damage claims. | Covers third-party liabilities and own damage as per the policy terms. |
Coverage | Works only as an add-on* to an eligible own damage/comprehensive policy. | Provides the base insurance coverage for your vehicle. |
Claim Settlement | May result in a higher claim amount by reducing depreciation deductions on eligible parts. | Depreciation is generally deducted while settling eligible claims. |
Premium | Available at an additional premium. | Premium depends on the selected coverage and vehicle details. |
Eligibility | Generally available for newer vehicles, subject to the insurer's guidelines. | Available for all eligible vehicles. |
Key Features and Benefits of Zero Depreciation in Car Insurance
Choosing zero depreciation car insurance can offer several advantages, including:
- Lower Depreciation Deductions: Helps reduce depreciation deductions on eligible parts during approved own damage claims.
- Reduced Out-of-Pocket Expenses: You may have to pay less towards eligible repair costs.
- Better Claim Value: Since depreciation on eligible parts is reduced, the payable claim amount may be higher than under a standard policy.
- Suitable for Newer Cars: It is especially useful for newer vehicles where repair costs can be relatively high.
- Greater Financial Convenience: Helps you manage unexpected repair expenses with fewer depreciation-related deductions.
Who Should Opt for a Zero Depreciation Car Insurance Add-on Cover?
A zero depreciation car insurance add-on* can be a good choice if you want to reduce depreciation-related deductions during eligible claims.
It can be suitable for:
- Owners of newly purchased cars.
- People who own premium or luxury cars with expensive spare parts.
- Drivers who frequently travel in busy cities or accident-prone areas.
- Individuals who are looking to reduce their out-of-pocket repair expenses after an insured accident.
Since this is an optional add-on*, it is available at an additional premium and is subject to the policy terms and conditions.
How is Depreciation Calculated?
Depreciation represents the reduction in the value of vehicle parts due to age and usage. During an own damage claim under a standard car insurance policy, the applicable depreciation is deducted before the claim amount is calculated.
The depreciation amount generally depends on:
- The age of your car
- The type of part being replaced, such as plastic, rubber, glass, fibre, or metal
- The depreciation rates specified under the applicable policy guidelines
For eligible claims under zero depreciation car insurance, depreciation deductions on covered parts may be reduced or waived.
Coverage Under Zero Depreciation Car Insurance
Inclusions
Depending on the policy terms and conditions, zero depreciation car insurance can help reduce depreciation deductions for repairs arising from:
- Accidental damage.
- Fire and explosion.
- Natural calamities such as floods, cyclones, storms, and earthquakes.
- Man-made events such as riots, strikes, or vandalism.
- Damage occurring while the vehicle is being transported, where covered under the policy.
Exclusions
This add-on* generally does not apply if the loss occurs due to:
- Driving without a valid driving licence.
- Driving under the influence of alcohol or drugs.
- Normal wear and tear or mechanical breakdown.
- Intentional or wilful damage.
- Consequential loss caused by continuing to drive a damaged vehicle.
- Participation in illegal racing or speed testing.
- Using the vehicle for purposes not covered under the policy.
- Damage occurring outside the geographical limits specified in the policy.
Note: It is important to refer to the policy wording for the complete list of exclusions.
Factors Affecting the Premium of Car Insurance with Zero Depreciation
The premium for zero depreciation car insurance depends on several factors, including:
- The age of your vehicle.
- The make, model, and variant of the car.
- The city or location where the vehicle is registered.
- Your previous claim history.
- Any additional add-ons* selected with the policy.
How to Purchase Zero Depreciation Car Insurance Online
Buying zero depreciation car insurance online is simple. One can follow the steps mentioned below to buy zero depreciation car insurance from SBI General Insurance.
- Visit the SBI General Insurance website or mobile app and enter your vehicle details.
- Choose a comprehensive car insurance policy and add the Zero Depreciation Cover, if eligible.
- Review your policy details, complete the online payment, and receive your policy documents via email.
How to Renew Zero Depreciation Car Insurance Online
Renewing your policy is just as easy. Follow the steps mentioned below to renew your policy:
- Log in to the insurer’s website or mobile app.
- Select the policy you wish to renew.
- Review your coverage and update your details if required.
- Complete the payment online and receive your renewed policy electronically.
Why Choose Zero Depreciation Cover from SBI General Insurance?
With SBI General Insurance, you can enhance your comprehensive car insurance policy by opting for a Zero Depreciation Cover at an additional premium. This add-on* helps reduce depreciation-related deductions on eligible parts during approved own damage claims.
In addition to this benefit, SBI General Insurance offers a smooth claims process, 24x7 customer support, and access to 9,277+ network garages across India. Whether you're buying a new policy or renewing an existing one, the Zero Depreciation Cover can be a valuable addition for eligible vehicles, helping you manage repair costs more effectively after an insured accident.
Conclusion
A zero depreciation car insurance add-on* can help you manage repair expenses more effectively by reducing depreciation deductions on eligible parts. Understanding how it works is important as it helps you make a more informed insurance decision.
Why Customers Love Us?
FAQs
Yes. The number of claims allowed under a Zero Depreciation Cover may be limited depending on your insurer and policy terms. Check your policy schedule or contact your insurer to understand the applicable claim limits.
No. A Zero Depreciation Cover is available only with a comprehensive car insurance policy or an own damage policy. It cannot be purchased with a standalone third-party insurance policy
You can register a claim through the SBI General Insurance website or mobile app. Alternatively, you can contact the customer support team that operates 24x7 for assistance with claim registration and the required documentation.
A Zero Depreciation Cover helps reduce depreciation deductions on eligible parts replaced during an approved own damage claim. This can increase the payable claim amount and lower your out-of-pocket repair expenses, subject to the policy terms and conditions.
No. It generally applies only to eligible parts specified in the policy. The coverage, applicable parts, exclusions, and claim conditions vary by insurer, so it's important to read the policy wording carefully.
It depends on your car's age and whether the add-on* is available for your vehicle. Since many insurers offer this cover only for vehicles up to a specified age, it's worth checking your eligibility before purchasing the add-on.
Since Zero Depreciation Cover is an optional add-on*, it increases your premium by an additional amount. The exact cost depends on factors such as your car's age, make and model, location, and the insurer's pricing.
No. A Zero Depreciation Cover is linked to the insured vehicle and policy. It cannot usually be transferred to another owner when the vehicle is sold.
A comprehensive car insurance policy provides the primary insurance cover for your vehicle, including own damage and third-party liability. Zero Depreciation Cover is an optional add-on* that works with a comprehensive policy to reduce depreciation deductions on eligible parts during approved own damage claims. It does not replace a comprehensive policy or provide standalone coverage.
*Add-ons are subject to payment of an additional premium. For more details, please refer to the policy wordings and prospectus before purchasing the policy.
Note: Not all points are applicable to every motor insurance policy. Please read the policy wordings carefully to know the exact coverage offered by the motor insurance plan.
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