We all love our cars and give due care to their safety & maintenance. We all consider buying motor insurance as part of our car care plan. In India, buying a third party motor insurance is compulsory, without which driving on the roads will be considered as illegal.
Motor insurance in India has two broad sections – Third party liability & Own damage cover. If you choose to cover the insurance for own damage along with mandatory third party liability, then you should opt for a comprehensive cover policy.
Comprehensive cover means that the insured will be indemnified against the loss or damage to the vehicle and/or its accessories due to:
- Fire/explosion-self ignition/lighting.
- Burglary/Housebreaking or theft.
- Riot & Strike.
- Earthquake (Fire & Shock damage).
- Flood/Typhoon/Hurricane/Storm/tempest/inundation/cyclone/hailstorm & frost.
- Accidental external means.
- Malicious act.
- Terrorist activity.
- Whilst in transit by road rail inland-waterway lift elevators or air.
Depreciation Calculation during Claim: In the event of any damage happening to one’s car, the claim amount is subject to depreciation; and the depreciation on different part varies as per the insurance company’s policy. For example:
|Rubber/nylon/plastic parts, Tyres & tubes, batteries & air bags||-50%|
|Fiber glass components||-30%|
|All other parts including wooden parts||-Up to 50% as per the age of car.|
Zero Depreciation Cover:
One of the important add-on covers is the Zero Depreciation cover, also known as the Nil depreciation or Bumper to bumper cover.
The above mentioned depreciation on parts will not be applicable, if one has taken a comprehensive cover policy along with Zero depreciation cover.
Zero Depreciation cover simply means comprehensive cover without factoring in for depreciation.
When & who should choose a Zero Depreciation cover?
- All brand new car owners.
- New/ Inexperienced drivers.
- Owners of luxury cars.
- Those living in risky & accident prone areas.
- People who are too cautious & concerned about the smallest dents.
- Cars that have expensive accessories & spare parts.
Important note about Zero Depreciation cover:
- Due to Zero Depreciation cover, the premium goes up by 15 to 20% in comparison to the standard comprehensive cover.
- Zero depreciation cover is normally offered to cars up to the age of 5 years. The insurance company may offer cover from the 6th year onwards, subject to a good claim history & after a physical inspection of the vehicle.
- The number of claims made under the Zero Depreciation cover is restricted and varies from 2 to 3 claims under one policy year.
- Normal wear & tear and mechanical breakdown is not covered under this.