With a multi tude of addon's being made available for car owners it can be difficult to decide on right add on selection for your car. Zero depreciation is one such add on which has a key benefit for the insured but can come at a high premium.
Under a comprehensive insurance policy, damages to the vehicle on account of accident are covered. However for repair of the vehicle if any part is being replaced, insured has to bear a fixed percentage of the part cost from his pocket. Percentage to be borne is dependent on the part material (for eg, 50% depreciation for plastic parts) and vehicle age (for eg, 10% depreciation on metal parts for 1-2 yr old vehicle). Zero depreciation add on covers the applicable depreciation thereby covering 100% of the part cost.
Zero depreciation cover is on account a must have cover considering the high cost of car parts. Further the impact on the customers pocket would keep increasing as the number of parts to be replaced for repair job increases.
While selecting zero depreciation cover though, apart from price customers should verify 1. whether apart from depreciation the insurer also charges salvage deduction and 2. whether there is any limit on number of claims under zero depreciation (some insurers allow only first 2 claims).
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