Zero Depreciation Car Insurance Cover After 5 Years (2024)

FAQs

Zero Depreciation Car Insurance Cover After 5 Years? ›

Remember, a zero depreciation add-on cover is only applicable for cars less than five years old. A zero depreciation covers for the cost of your car's part depreciation during claim settlement and does not cover for your compulsory deductibles while it cannot be opted for cars more than five years of age.

A zero depreciation add-on cover, also known as Nil Depreciation and Bumper-to-Bumper cover, is a popular car insurance add-on cover under the own damage section of the car insurance policy. Insurance can be checked online from the website Parivahan or mParivahan app which is available on the play store.

Zero depreciation cover, or Bumper to bumper coverage, is a type of coverage add-on that comes along with bike insurance policies. It provides coverage for the damage without considering depreciation cost of the vehicle.

Own damage insurance vs zero depreciation car insurance. You can get car insurance coverage for own damage only if you buy a Comprehensive Plan. On the other hand, you need to separately buy the Zero Depreciation car insurance add-on to get coverage against depreciation on the vehicle.

There's no pre-determined rate at which a vehicle will depreciate. Within the first year, many cars will lose up to 20% of their value. After that, they may lose about 15% more per year until the four-or five-year mark. Use our car depreciation calculator to get an idea of how much your car may be worth over six years.

However, such deduction can also be covered for settlement by opting for zero depreciation car insurance or nil depreciation or bumper to bumper car insurance along with your basic comprehensive cover. Remember, a zero depreciation add-on cover is only applicable for cars less than five years old.

You have to pay an additional premium on your comprehensive car insurance policy to get this add-on. Under zero-dep insurance cover, you can make up to two claims in a policy year. When filing a claim under a zero-depreciation policy, you need to pay the applicable compulsory deductible.

Zero depreciation cover is also known as bumper-to-bumper or nil depreciation cover. With zero depreciation coverage, the policyholder does not have to pay the depreciation value of the damaged or replaced parts and can claim the full amount under their comprehensive car insurance.

Since zero depreciation car insurance offers higher payouts, it keeps your out-of-pocket expenses to a minimum. This ensures that, in case of a claim, you do not have to use your hard-earned money to cover the cost of part replacements.

A zero depreciation cover does not protect the car from damage to its engine through oil leakage or water ingression. Standard wear and tear to cars and car parts such as clutch plates, tyres, bearings, etc. are not covered under nil depreciation insurance.

Which insurance is best for a car after 5 years? ›

With zero depreciation insurance, car owners are shielded from the financial burden of depreciation-related deductions during claim settlements. This means that even after 5 years of ownership, the policy ensures that the entire cost of repairs, including parts prone to high depreciation, is covered.

If you have a brand new car, comprehensive insurance is a better option as it offers a more comprehensive coverage at a lower premium. On the other hand, if your car is more than 5 years old, zero depreciation insurance is a better option as it offers coverage without considering depreciation.

Zero Depreciation is defined as the decline in the price or value of the product over a period of time. In car insurance depreciation cover the depreciation is calculated on the basis of the age of the vehicle and the damaged part.

As noted, a brand new car usually drops about 20% in value after one year. And after five years, it will often be worth about 60% less than what you bought it for. But these numbers are estimates. Several factors determine how much car values fall over time.

After two years, your car's value decreases to 69% of the initial value. After three years, your car's value decreases to 58% of the initial value. After four years, your car's value decreases to 49% of the initial value. After five years, your car's value decreases to 40% of the initial value.

If the other driver is at fault in your accident and has auto insurance, then you should be entitled to a diminished value claim. However, it is primarily up to you to prove your car's diminished value, and the insurer will likely only pay the claim if you can do so effectively.

Contacting the customer service department

You can call the customer service department of your insurance provider to know more about your policy. Share your policy number with them, and they will offer you the information that you need.

If your policy has a recoverable depreciation clause, your insurance payment will arrive in two checks. The first will cover the actual cash value of the insured item. In order to claim the recoverable depreciation cost, you must first actually replace the item and submit the receipts and paperwork to your insurer.

Property underinsurance is where the insured value of a property is insufficient to cover the cost of rebuilding or repairing it in the event of a disaster. Contents underinsurance is when the replacement value of personal belongings, such as jewellery, electronics, or artwork, is not accurately assessed and insured.

Work with a third-party company. There are several third-party companies that might be able to help you find an unclaimed life insurance policy. You can contact the National Association of Unclaimed Property Administrators or the National Association of Insurance Commissioners to find out if you're owed any funds.