No doubt four-wheelers come with few risks due to the chances of accidental damage or wear and tear of its parts. So, it is necessary to protect it and buy a third-party motor insurance policy as per the Indian Motor Vehicles Act, 1988.
With a proper insurance policy, anyone could avoid troubles like huge traffic fines.
There are two policies to buy car insurance: Zero depreciation and comprehensive policy. Therefore, just #ThinkAhead when choosing car insurance similar to buying a car.
These two policies have their pros and cons. Further, read the major differences between zero depreciation and comprehensive insurance policies to make every penny worth it.
What Is A Comprehensive Car Insurance Policy?
The word "comprehensive" itself means inclusivity. It has several fundamental policies.
Generally, comprehensive insurance comprises damage cover and third-party liability cover such as injury, and property damage.
Also, causes like theft, fire, natural disasters, and personal accidents are a part of this policy.
Hence, a comprehensive insurance policy is more than just a third-party insurance.
The Zero Depreciation VIP Entry
As comprehensive insurance includes a premium four-wheeler insurance policy, there are numerous "Benefits" or "Add on" covers. These covers are more premium-based than the comprehensive car insurance coverage.
It also has add-ons such as engine protection cover, roadside assistance, consumable cover, and zero depreciation car insurance.
What Is Zero Depreciation In Car Insurance?
Suppose a car accident requires repairs. How to claim the damage? Being the owner of the vehicle, one should know the value of it and its parts which depreciate after some time.
In this situation, the claim for the damage cover would be just the value after depreciation.
The older the vehicle, the less the depreciated value. Thus, choose zero depreciation or bumper-to-bumper depreciation to avail the full value of the vehicle or its parts for insurance payment. It contains every part of the vehicle like rubber, plastic parts, tyres, batteries, nylon parts, fibreglass, airbags, and tubes.
The insurer would not cut off any depreciation (decrease in vehicle's value because of age and wear and tear) cost. Additionally, the depreciation amount is evaluated according to the depreciation rates of IRDAI.
Moreover, this policy is not a standalone policy but an add-on cover. It is not available separately or along with a third-party liability policy. Include it in comprehensive coverage and remember it is there for only the first few years of the car's life. But, a consistent buyer will surely get zero depreciation for the rest of the car's age.
Comprehensive Vs Zero Depreciation In Four-Wheeler Insurance
Zero Depreciation Cover | Comprehensive Car Insurance |
1. It is an add-on cover to buy with a comprehensive plan. | It has multiple covers in a single policy. |
2. Coverage for depreciation of all the car parts with comprehensive coverage. | Comprehensive coverage includes own damage, third-party liability, natural disasters, and personal accidents.
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3. It does not contain the whole cost of repairs for the vehicle. | It comprises the whole cost of repairs for the vehicle. |
4. No depreciation for repairing the plastic parts.
| 50% depreciation on plastic parts before the claim payment.
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5. The policyholder demands the entire payment for the cost incurred. | Payment will rely on the vehicle depreciation. |
6. The depreciation rates are nil. | The depreciation starts increasing with the car's age and is not a part of the claim. |
7. It is not accessible for every vehicle and has a limited span of 5 years older or less. | It is accessible for many of the vehicles regardless of age. |
Is Comprehensive Or Zero Depreciation Better In Car Insurance?
While selecting between comprehensive and zero depreciation in car insurance, check the car’s age, coverage, model, usage, and budget. For a brand-new car, comprehensive insurance is the best option as it has comprehensive coverage at a low premium.
On the contrary, it is advisable to have zero depreciation in car insurance if a risky area increases the chances of car damage. Also, it works great for luxury cars with costly components and parts.
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The Bottom Line
In car insurance, it is crucial to decide whether a comprehensive or zero depreciation policy as an add-on to it is viable. Both of these policies come with its upsides and downsides. Comprehensive insurance takes care of personal damages, natural disasters, and theft.
In contrast, zero depreciation insurance makes sure the value of the car and its parts stay intact for high-risk regions or new cars with regular usage. Eventually, it depends on usage, car age, and budget. Thus, proper evaluation can lead to the ideal insurance to protect four-wheeler vehicles on Indian roads.
Disclaimer / TnC
The policy is subjected to terms and conditions & inclusions and exclusions stated in the policy wording. Please go through the documents carefully.
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