After an accident, the claim amount for replacing specific car parts may be reduced by depreciation deductions. Depreciation means a decrease in the value of car parts over time. This can increase the amount paid for repairs by the car owner. Choosing the zero depreciation car insurance add-on can address this gap by waiving depreciation deductions on eligible car parts during claim settlement, subject to terms of the policy.
Know when the zero depreciation add-on can be purchased to select coverage that aligns with your vehicle needs. If you are wondering when it will be the right decision to buy a zero-depreciation add-on for your car, read on.
Zero depreciation is an optional add-on available with an own damage or comprehensive car insurance policy. With this coverage, the insurer does not deduct depreciation on eligible car parts when settling their own damage claim. In contrast, in standard car insurance policies insurers deduct depreciation based on the age and value of car parts.
As determined by IRDAI, the depreciation rates are:
However, with zero depreciation add-on, the insurer bears the full costs of repairing damaged parts. This helps reduce your out-of-pocket expenses during claim settlement. You can also add this during your existing car insurance renewal.
A new car holds more value in the market, and its parts are also expensive. Even minor damage can result in high repair costs. A zero depreciation add-on can help you receive a high claim amount without deductions for depreciation. This works best during the initial years of ownership.
The spare parts for luxury cars are expensive. Repair and replacement costs are much higher than for standard vehicles. The zero depreciation add-on covers depreciation during a claim and minimises your financial burden.
Traffic congestion, poor roads or accidents pose significant problems in some cities and areas. This also increases the risk of vehicle damage. The zero-depreciation add-on simplifies repair costs and provides financial assistance following an accident.
Driving daily on busy roads increases the risk of scratches and dents and can cause collisions. Frequent driving also increases the likelihood of filing insurance claims. A zero depreciation add-on will help lower your out-of-pocket repair costs and will increase your claim value.
Depreciation is a part of the settlement process in comprehensive car insurance. This means you might also need to pay a portion of the repair costs. Choosing the zero depreciation add-on minimises these deductions and lets you save money in case of unexpected repairs.
Yes, in most cases, a zero depreciation add-on is worth the additional premium, offering enhanced financial protection with high claim payouts. It works well for premium-category vehicles, new cars, and cars driven frequently. Choosing this add-on might raise your insurance premium slightly, but financial savings during a claim often outweigh the additional costs.
The zero depreciation add-on helps minimise your financial burden in case of unexpected repair costs. It also minimises the depreciation deduction on eligible car parts and allows you to receive a high claim amount. This is thereby a practical choice for premium, new and frequently driven four-wheeler vehicles. Choosing the right add-on is essential to enjoy enhanced financial security and peace of mind.
TATA AIG offers zero depreciation as an add-on with own damage and comprehensive car insurance policies. It waives the depreciation deductions on eligible car parts when settling claims, subject to the terms and conditions of policy. This add-on can be chosen during purchase or policy renewal. They offer 8+ add-ons with different add-on bundles, allowing policyholders to choose appropriate coverage that aligns with their specific requirements.