Depreciation means decrease in the value of an asset due to use. Zero depreciation or ‘zero dep’ policies are gaining popularity with increasing awareness among vehicle owners in India. These policies offer full claim without deduction for depreciation on the value of parts replaced. This cover extends to the repairing costs of fiber, glass, rubber parts and plastic. In standard motor policy, rate of depreciation ranges from 0% to 40% depending on the age of vehicle and the type of material, thereby making you shell out some money from your pocket. While in case of a zero depreciation policy, no depreciation is charged, thus a 100% re-imbursement on replaced or depreciated parts can be availed leading to optimum benefit under the cover.
Zero depreciation cover is usually available on new cars and mostly do not cover cars that are more than three years old. The premium is slightly higher than in a standard motor policy. Also certain companies put a restriction on the number of claims that can be opted without depreciation during a policy period.
There are few conditions which are not covered under the zero depreciation policy.
You can buy depreciation cover online along with your car insurance policy.
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