When purchasing a car, people today carefully consider not only the model and features but also the insurance options. Often, individuals find themselves confused between zero depreciation (Nil Depreciation) and normal insurance policies. Furthermore, sometimes even insurance agents fail to properly explain the differences between the two. This article aims to clarify which insurance type is most suitable for you, helping you make an informed decision and avoid future regrets.
**What is Zero Depreciation Cover?**
Zero depreciation cover is an add-on policy that fully covers damage to any part of the car—plastic, rubber, or fiber. This means that if an accident or damage occurs to the car, the insurance company bears the entire repair cost. Consequently, this cover is considered most beneficial for new and luxury cars. Although the premium is higher than normal insurance, it saves you from large expenses in the long run.
**Difference from Normal Insurance**
In normal car insurance, depreciation, that is, the age of car parts, is considered when determining the claim. The older the part, the less payment you will receive. For example, if you claim for plastic parts on a five-year-old car, you won’t receive the full amount. However, with zero depreciation, no matter how old the car is, the payment is equal to the cost of the new part. This is its biggest advantage.
**How Long Does the Benefit Last?**
Most companies offer zero depreciation cover for only five years. Some insurance companies extend it to seven years. After this period, only normal insurance is available for older vehicles.
**Who Should Opt for Zero Depreciation?**
* Those buying a new car.
* Owners of expensive or luxury cars.
* Those who frequently drive long distances or in heavy traffic.