6 common misconceptions about zero depreciation add-on coverage you should know!
Owners of comprehensive auto insurance can increase the policy’s coverage by adding extras. One such add-on that enables automobile owners can obtain full coverage without accounting for depreciation charges is a zero depreciation cover.
There are, nevertheless, certain misunderstandings and falsehoods regarding various insurance terms. Here is a thorough explanation of a zero depreciation add-on to dispel common misconceptions about it.
What does add-on zero dep insurance cover?
Vehicle owners have the option of adding zero depreciation add-on coverage when purchasing a comprehensive auto insurance policy. The value of the car’s depreciation is covered by this addition. Therefore, when someone purchases zero-dep auto insurance, they are able to receive a bigger payout for a comprehensive insurance policy without having any depreciation assessed or subtracted.
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6 common myths about zero depreciation add-on coverage
There are certain misunderstandings among policyholders about the zero depreciation cover. Let’s examine the six widespread misunderstandings about the zero dep cover:
Multiple claims can be made
Many people think they can request zero depreciation as often as they’d want during the course of a policy. This is untrue, though. The claim limit is typically up to two times. However, it could differ from one insurance to the next.
Covers consumable costs
The cost of consumable items necessary to fix a damaged car, such as nuts, lubricants, bolts, etc., is not covered by zero depreciation insurance. Only those who choose a consumable add-on cover while purchasing a comprehensive insurance policy are eligible for this coverage.
Not applicable for two-wheelers
Some people think that two-wheelers cannot be covered by insurance with zero depreciation. It is completely false, though, as both two- and four-wheelers qualify for this add-on. Any car owner who purchases or renews comprehensive insurance is able to choose this add-on.
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No exclusions
The zero-dep cover is no different from other insurance policies in that it contains some exclusions. Therefore, it excludes normal wear and tear, harm to uncovered car components, leaks, mechanical failure, etc.
Available for old vehicles
The age restriction for purchasing zero-dep insurance on a car is subject to a specific rule. Zero depreciation insurance cannot be purchased for a vehicle older than five years. In general, it applies to automobiles that are five years old or newer.
Covers deductibles
The deductibles are not covered by the zero depreciation add-on. In place of this, policyholders might choose Compulsory Deductible, a nominal amount that has been predetermined, when making claims under the insurance policy.
Benefits of zero dep add-on cover
Like any other add-on, zero depreciation cover gives the policyholder additional benefits and coverage. As follows:
Helps save money
Without a zero depreciation cover, the policyholder will get compensation after the insurer factors in the depreciation charges of the car. Out-of-pocket costs are reduced. So having a zero-dep cover is a terrific way to make wise financial decisions.
A higher claim amount
The depreciation cost is not charged under this add-on, so policyholders get a higher value while claiming against the insurance policy.
Assures peace of mind
Policyholders can stay relaxed after purchasing a zero-dep cover as they get extended coverage. It helps them financially protect themselves efficiently in the event of any mishap.
The following factors affect zero depreciation car insurance premiums:
- Age: The age of an insured vehicle plays a significant role in determining the car insurance policy premium. This is because an older car’s premium is higher than a new one’s.
- Model: There are specific car models that cannot be insured with a nil depreciation policy. So, one should consult with the insurer before buying this add-on.
- Location: The risks faced by a car can vary from one location to the other. Thus, the zero-dep premium amount may vary according to the city where the car is being driven.
Conclusion
Indeed, a zero dep cover provides various benefits to car owners. Vehicle owners should buy this cover to maximize the benefits of their comprehensive policy plan. It can protect the policyholders from hefty expenses down the line.
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