Anyone contemplating a vehicle purchase by now would know that choosing the right one among a market full of new cars is just the beginning. From dealers to the authorities, there is a ton of paperwork to be completed. Amidst it all, most buyers tend to get overburdened with information in no time. This often affects decision making at crucial stages and if one isn’t careful, then they could stand to lose a lot of money, or worse – make a bad call.
Moreover, when it comes to something as critical as claims coverage, buyers are still struggling to come up to terms with what is zero depreciation car insurance in the first place. Put simply, it means that in-case of a damage-claim, the insurer would make good the entire cost of the claim. This is a step ahead of the regular comprehensive insurance policy which would require the insured to pay from his/her pocket the depreciation component in the claim.
Having a zero depreciation insurance cover means that the car owner would typically have their entire claim amount paid-off/reimbursed. It is much more desirable than the way a claim under a comprehensive insurance cover. This is because, under the latter, a claim will be paid out by the insurer based on the current valuation of the vehicle adjusted against depreciation. Thus, in a regular, comprehensive insurance policy, the car owner would still have to pay out his/her pocket towards the repairs. On the other hand, under a zero dep policy, the insurer would cover the entire amount of the claim.
Typically speaking, for all the advantages, zero-dep policies are priced higher than their regular comprehensive-coverage counterparts. The price differential is usually in the 20-30% range. So for someone wondering about what is zero depreciation car insurance, and whether it is worth it, they must take this into account. For one is already paying by means of a higher premium towards the cost of the claims they would make in the future. For some owners, this could be a deal breaker. But for others, it may be an extremely wise call to make.
New cars these days are starting to feature increased amounts of sophisticated gadgetry and technical systems. In the event of an unfortunate mishap, the repairs/replacement cost of the components could easily outweigh the higher premium paid towards the zero-dep policy. So do keep this mind when you’re deciding between the level of insurance protection you’re getting for your car.
