Similar to other pieces of tangible assets, vehicles also lose their value with time due to wear and tear. It can be best referred to as depreciation, and the rate at which it happens is called a depreciation rate. This wear and tear are taken into consideration when settling claim requests from the insured. If the vehicle is too old, the depreciation may reduce the claim amount by a significant margin. If you don’t want depreciation to affect the claim amount, you will have to invest in special add-ons like the zero dep car insurance. Although it is a simple add-on, people often tend to misunderstand it.
If you’re planning to buy new vehicle insurance or upgrade the coverage of the existing one, you should seriously consider getting a zero depreciation car insurance cover for your vehicle. There are myths surrounding this add-on that are preventing people from buying it. If you’re still skeptical about purchasing this add-on, this guide is for you. Below we have busted all the common myths that are generally associated with the zero depreciation add-on. So let’s head straight to the myths shared below.
Myth 1: Consumable Cost is Covered
When a car is taken to a garage for repair post an accident or some serious maintenance work, they employ a range of consumables like nuts, bolts, oils, etc. Some people believe that paying for zero depreciation will also cover these consumable expenses, which is not the case. If you don’t want to bear these expenses from your own pocket during repair, you will have to invest in a separate add-on called the consumables cover add-on.
Myth 2: There is no Limit to Claims Related to Zero Dep Add-On
To protect the insurer’s interest and prevent people from misusing this add-on, insurance companies limit the number of times an insured can claim this benefit during a policy period. Although the number of permissible usage times can vary from one insurance company to another, it is generally restricted to two claims per person during a policy period. To know the exact limit on claims, you should read the policy’s terms and conditions and the add-on before making any investment.
Myth 3: It is Easily Available to Old Vehicles
Insurers provide various add-ons to car insurance, but not all of them are available for every car. For example, if you own a car older than five or six years, insurers may not give you the option to buy a zero depreciation add-on. Some people believe every person, irrespective of their car age, is eligible to include any add-on to their standard insurance policy, which is not true.
Myth 4: It Covers Deductibles
For the uninitiated, deductibles refer to the payment an insured has to make during claim settlement. It is generally a small percentage of the claim amount because the insurer never pays 100% claim reimbursement. For example, if you’ve filed for a claim and your policy has a deductibles clause citing a 5% rate, you will have to bear the 5% of the claims, and the insurer will pay the remaining 95%. Investing in a zero depreciation add-on doesn’t make you an exception from paying deductibles. It is a mandatory payment that people filing for the claim have to make.
Myth 5: There are No Exceptions to It
The zero depreciation add-on doesn’t come without any exceptions. If your car gets damaged due to regular wear and tear, technical failure, or an oil spill, you cannot use the zero depreciation cover in these cases. However, it is best to refer to the exceptions clearly by going through the terms and conditions stated in the policy.
Also Read – How to Find Fair Market Price of Any Used Car?
Myth 6: It is Only for Four-Wheelers
While zero depreciation add-on is primarily for cars, some companies also offer it for two-wheelers. You just have to look around and do some research to identify policies that provide this add-on for two-wheelers. If you’re relatively new to vehicle insurance, you can join online communities on Facebook around vehicle insurance and ask for recommendations.
Get More from Your Insurance Policy
Although most insurance companies offer decent coverage in their vehicle insurance, it sometimes is not enough for people. It is why they invest in add-ons to upgrade the policy coverage. Zero depreciation add-on is one of the best available add-ons or riders that ensure people get the most benefit during claim settlement. It comes at an additional cost and increases the premium amount, but the investment is well worth it in the long run.
Also Read – 6 Steps to Consider Before Buying a Used Car