In the event of a car accident, it can be extremely frustrating to find that your motor insurer is only going to cover you for a part of the expense to replace the affected parts because the value has gone down due to depreciation. To keep this from happening, it is advisable to buy zero depreciation rider.
A zero depreciation cover is a rider that you can avail on your car insurance policy. Here, in case of an accident, the insurance company will give you the full claim without making any deduction for depreciation on the value of the car parts replaced. In other words, you receive the entire sum from your insurance company when your car suffers damage in a collision. Generally a standard motor policy covers you for losses when your car is damaged or stolen, and you receive compensation after a standard deduction of depreciation. But with the zero depreciation rider, you stand to receive the whole compensation amount.
When does it make sense to buy zero depreciation cover?
Opting for this rider makes sense in the following cases:
- When you buy a new car - Depreciation comes into play from the first day you buy a new car. If you were to damage your car in the following days, you will only be able to claim a part of the cost to replace damaged parts on account of depreciation.
- If you are a new driver - If you’ve just learned to drive and are planning on driving a newly-purchased four-wheeler on the road, it is recommended that you get the rider on your insurance policy.
- If you own a luxury car - Each and every part of a luxury car costs a lot of money. It would thus only make sense to get the full value of a replaced part.
Factors to consider before opting for zero depreciation cover:
The decision of whether or not to get this rider requires some serious thinking. Before buying the rider it is important that you take the following factors into consideration:
- Age of car - Zero depreciation policy is only applicable on cars that are no older than five years.
- Number of claims - Usually there is a limit on the number of claims you file annually. Check the number of claims your motor insurer allows and opt for one that permits you to make several claims.
- Cost - A policy that comes with this rider is going to cost you more. But in the event that a claim arises, you will find that the rider will help you save a lot of money.
In conclusion, there are several benefits to having a zero depreciation rider to your car insurance policy. If prices are what’s holding you back, weigh the benefits against the costs and accordingly decide whether you want to opt for this rider.