As all car owners know, having four-wheeler insurance, including specialized coverage like Mazda insurance, is a critical choice. When you buy car insurance, the zero depreciation cover is an important factor to keep track of.
Not many auto owners know about this, so let us give you the details!
What is Zero Depreciation Cover in Car Insurance?
The premium of a car insurance policy depends on many factors. One of these factors is depreciation value — or the amount by which the market value of your car reduces every year. As new cars make and models are launched, an old car’s value will decrease compared to newer models.
Why is this important? Because in case of a claim, the insurance company usually offers compensation based on the depreciated value of your vehicle. In the end, the vehicle owner will have to bear the extra cost, which is the difference between the depreciated value of the car (or car parts) and the actual cost of replacement.
As we said before, this is fine print that not all buyers are told when they buy car insurance! This is why zero-dep car insurance is a must-have in today’s times!
Understanding Zero-Dep Insurance — The Benefits
There are 3 main benefits between regular car insurance and zero-dep car insurance coverage. Below, we explain these 3 pointers in detail:
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- Claim compensation: The primary difference between these two options is reflected in the claim compensation. Average car insurance will only compensate you based on the vehicle’s current market value, as explained above. However, with a zero depreciation cover in car insurance, your vehicle will be protected against market value reduction. All compensation and claims will be judged based on the original market value of the car or car parts.
- Premium costs: For the insurance company to pay full cover no matter the age of the car, there has to be something of value for them in return as well. This comes in the form of higher premium costs for zero-dep car insurance. The extra premium you pay is well worth the extra amount though, given that you are getting full coverage for a lifetime!
- Eligibility gate of the vehicle: This is an important stipulation! Normal car insurance covers are applicable for all vehicles, no matter their age. Let’s say you are buying a second-hand car about 7 years old. You can still get insurance for it. However, zero-dep car insurance covers can only be bought for new cars or cars within the specified age eligibility. Most insurance providers cap this at 5 years post-manufacture. Please be aware of this clause and your car’s age when you buy zero depreciation car insurance.
Now, the make-or-break question – Is zero dep car insurance worth it?
When you compare car insurance, you see that zero dep covers work well for new and luxury cars which are expensive to buy or replace. The extra money you pay as a premium is a long-term investment in protecting your car. In tough times, you will not have to worry about paying a huge lump sum out of your own pocket and you can depend on your car insurance to cover most of the cost in any calamity.
Making the Choice — Should You Buy Zero-Dep Car Insurance Cover?
Well, we can’t make the choice for you but we can tell you if it’s something you should think about when you buy your car insurance. Zero-dep car insurance covers are great for new and luxury cars, so if you are buying a fancy pair of wheels, you should consider investing in zero-dep covers. It is also good for new drivers who may be more accident-prone. This way, you don’t have to incur huge expenditures for every single scratch or accident.
A zero-dep car cover gives you good protection in the long term. So, think wisely before you buy. Happy driving!
