Regular comprehensive four-wheeler insurance covers repairs to your vehicle in case of accidents, theft or other damages. However, there is a catch: depreciation. As cars age, their value decreases.
So, when making a claim, insurance companies subtract this depreciation from the repair cost. This means you might receive less money than the actual repair bill, leaving you to cover the difference.
This is where Tata AIG Zero Depreciation car insurance comes in. It is an optional cover with your comprehensive car insurance that covers the complete repair cost. In simpler terms, you get a bigger payout for repairs, minimising your financial burden.
But is this add-on genuinely worth it? Let us get into the details below!
What is Zero Depreciation Car Insurance?
Zero Depreciation Cover in car insurance is an optional add-on that eliminates this depreciation factor. With this add-on, the insurer pays the full cost of repairs minus a standard deductible for replaced parts, regardless of their age. This translates to a bigger payout for you at claim time, minimising the financial burden of repairs.
Here is an example:
Let us say your 3-year-old car needs a new bumper that costs ₹10,000 and has 25% depreciation. With regular insurance, you might receive only ₹7,500 (₹10,000 – ₹2,500 depreciation). But with zero depreciation cover, you would get the full ₹10,000 (minus the deductible, if any).
While zero depreciation offers clear benefits, it also comes with a slightly higher premium compared to standard comprehensive insurance. So, consider your budget and car’s value when deciding if it is the right choice for you.
Benefits of a Tata AIG Zero Depreciation Cover?
Tata AIG’s Zero Depreciation Cover, like most zero depreciation add-ons offered by insurers, provides several advantages that can significantly ease the financial burden of car repairs after an accident or damage.
Here are a few reasons why you should opt for car insurance renewal zero depreciation add-on if you do not have this with your insurance plan yet:
- Reduced Out-of-Pocket Expenses: This is the most significant advantage. By eliminating depreciation deductions, you get a higher claim payout for repairs, minimising the amount you need to pay from your pocket.
This can be a major financial advantage in a scenario where your car sustains significant damage and requires the replacement of parts.
- Peace of Mind: Knowing that your insurance covers the complete repair cost, minus the deductible, can provide valuable peace of mind.
You can focus on recovering from the incident without worrying about significant out-of-pocket expenses for repairs.
- Protects Newer Cars’ Value: Newer cars tend to depreciate faster. With zero depreciation cover, you are protected against this depreciation for the chosen policy period.
This ensures you receive a closer-to-actual repair cost for your car, especially during the initial years of ownership when depreciation hits harder.
- Increases Coverage: By covering parts at their non-depreciated value, you effectively increase the coverage provided by your insurance.
This potentially exceeds the value of the car itself in some cases, depending on the damage and policy limits, translating to a higher car insurance claim amount.
What Should You Consider Before Opting for Zero Depreciation Add-on?
When considering a Tata AIG zero dep car insurance add-on for your car insurance, keep the following factors in mind:
- Coverage Details: Zero depreciation insurance does not cover all car parts equally. Parts like glass are typically excluded, and other parts may have depreciation deducted at specific rates rather than being fully covered. Ensure you understand what is and is not included in the policy.
- Car Age: Zero depreciation coverage is only available for cars that are not older than five years. If your car is more than five years old, this add-on is not an option.
- Additional Cost: This add-on increases your overall car insurance premium, as it provides an extra layer of protection by covering the depreciation of certain car parts.
- Claim Limit: Most zero depreciation policies limit the number of claims you can make. Usually, you can file a maximum of two claims during the policy period.
Things Not Covered Under Tata AIG’s Zero Depreciation Car Insurance Add-on
Understanding the exclusions is crucial. Here are the main things not covered under Tata AIG zero dep car insurance add-on:
- Driving Under the Influence: If your car is damaged while you are driving under the influence of drugs or alcohol, your claim will not be valid. No car insurance policy covers incidents caused by impaired or illegal driving.
- Incorrect Use of the Car: If your car, which is meant for private use, is damaged while being used for commercial purposes, the claim will not be valid. This exclusion also applies to your zero-depreciation cover.
- More Than Two Claims: The zero depreciation cover only applies to the first two claims during the policy term. This add-on does not cover additional claims.
Conclusion
Choosing Tata AIG Zero Depreciation car insurance ensures you receive maximum compensation without factoring in your car’s depreciation. This means higher claim amounts and better coverage for repairs or replacements.
With Tata AIG’s reputable service and extensive network of garages, you can trust your car is in good hands.
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