Zero depreciation cover for your Automobile

03 June 2019

A car is an asset that depreciates with time. Depreciation has an impact on the claim settlement about car insurance. One might assume that comprehensive car insurance will eliminate any out of pocket expenses, but you are wrong. Whenever you file a claim for car insurance, the insurance company will determine the amount payable after considering depreciation. This means you will have to pay a significant amount out of the total cost incurred for repairs. If you want to ensure that the impact of depreciation does not reduce your claim amount, you need to opt for a zero-depreciation cover.

What is a zero-depreciation cover?
It covers Depreciation amount deducted on the value of parts replaced as a result of a possible claim under Own Damage Section (Section I) of policy. When a car is damaged because of an accident, and you make an OD claim, the insurance company will not reduce the amount of depreciation from the claim amount.

Difference between a standard comprehensive cover and zero depreciation cover
There is an obvious difference between both the types of insurance cover. A zero-depreciation cover will provide the coverage of claim amount deducted on account of depreciation. In contrast, a standard comprehensive cover will not offer zero-depreciation, and they will estimate after deduction of Depreciation applicable to the parts as per the vehicle age. If your car is involved in an accident, the standard policy will subtract the amount of depreciation and then pay you the claim amount whereas a zero depreciation will pay the amount including depreciation amount.

Is it worth it? There is no denying the fact that a zero-depreciation cover has advantages over a standard policy and it comes with a cost. You are paying an additional premium to ensure that you do not have to bear out of pocket expenses in case of a claim in the future. Those consumers who do not mind higher rates but want peace of mind should opt for this cover. This cover will also put a restriction on the number of claims you are allowed to make in a year. This is to ensure that customers do not file claims for every minor dent or accident to avoid incurring any costs at all.

Should you buy the cover? If you have a new vehicle, this add-on will be worth the additional cost. There are instances where even the most careful and experienced drivers have ended up in an accident because the other guy was not careful. You never know what will happen on the next turn and this is why it is best to opt for a cover that will provide you with a complete claim amount.

If the additional premium does not pinch you, this is a good cover for any car owner. Consider the benefits of the cover and weigh it with the cost. You will realize you are paying for future costs. A zero-depreciation cover will give you complete peace of mind.
It is equally essential to ensure that you also procure the right auto insurance policy as that is going to be a real life-saver in various situations. That is why you may want to consider an auto insurance policy from Liberty General Insurance. For those applying for the insurance policy for the first time, click here.