Hidden Clauses in Zero Depreciation Car Insurance Plans
29 January 2023 by Gagan Modi
Know about Bumper to Bumper Car Insurance. Pros Benefits and Hidden Clauses in Zero Depreciation Plan
Zero Depreciation Car Insurance Hidden Clauses
Introduced in 2009 in India - Zero Depreciation Insurance Plans, often referred as Bumper to Bumper Car Insurance Policy is what an additional 'depreciation cover' cover offered on the car. Offered as additional cover for New Cars upto 5 years, now days Insurance Companies have extended and even offering Zero Depreciation cover for even 6th and 7th Year.
Even if you have comprehensive Policy Cover in previous year, you can still opt for Zero Depreciation cover in later year by informing Insurance company as the car requires physical inspection before extending zero depreciation cover.
Parts Depreciation under Comprehensive Policy
- 50% Depreciation is Deducted on all Rubber, Nylon, Plastic Parts, Batteries and Airbags
- 30% Depreciation is Deducted for 'Fibre Glass' components
- Wooden Parts as per Ageing of Vehicle (5% in 1st Year, 10% in 2nd Year, 30% in 3rd Year etc)
- Paint Cost as Separate Expense gets 50% Depreciation, while Paint along with Part Replacements gets 25% Depreciation
while under Bumper to Bumper plans - no depreciation will be deducted on any of these, except Battery & Tyres
However, some salient points while taking Car Insurance
» Compulsory Deductible of Rs. 1000 (if Engine < 1.5 Litre), Rs 2000 (if Engine > 1.5 Lit) is there in event of claim (in both Comprehensive & Zero Dep plans)
» Claim will be considered Void, if the person driving car was without driving License pr Driving License Expired
» If the person driving car was found intoxicated by drugs or under influence of Alcohol
» If Both Car Keys are Lost or Stolen - and Car is also stolen - Claim would be Null and Void, unless an FIR for Missing Car Key is reported in Nearest Police Station - before the actual asset i.e Car Stolen
Policy Exclusions - Not Covered under Zero Depreciation Plans
- Any Kind of Consequential loss, unless an additional cover take. For instance - Hydrostatic lock or Engine Protector due to consequential factor (unless covered with an additional cover - Engine Protector is when Engine gets Seized due to water Ingress or Engine Oil leakage due to which Engine gets stalled)
- Does not Cover Mechanical Breakdown (as that what would be covered under warranty & not under insurance)
- Does not Cover Cost of Consumables and Oil (Engine Oil, Brake, Clutch Oil, Gear Oil, Coolant etc) Change in Car, even if its accidental repair
- No Cover also for routine Maintenance Items or Wear and Tear Items including Clutch Plates, Friction Disc, Oxygen Sensor, Engine Mounts, Bearings etc
- Tyres Claim is allowed only when damage is due to accident including body shell also damaged. No cover only allowed for Tyres - if damage only has occurred to Tyre or unless Tyre secure additional cover taken
Important: Unless agreed upon, Salvage Value of the Parts (Scrap Value as assessed by Insurance Surveyor of Parts damaged & replaced under Insurance) will be deducted from Claim Amount - Though Some Companies declare it as 5 to 7% corresponding value of new parts
Know More: - Add on Covers in Motor Insurance
You can now Calculate Car Insurance Premium in Seconds
How Much is the Premium Different & Ageing Coverage
Premium is Generally higher to tune of 10% to 20% over Regular Comprehensive Policy.
Most of the Insurance companies do provide Zero Dep Cover for first 5 years of Ageing of the Vehicle.
After the period is expired - they only offer Comprehensive cover - even if you do not have claim till the 1st 5 yrs. This is done basis the risk probability and salvage value of the parts by the under-writing team. Generally - what we have seen - in Diesel Cars its offered for 1st 3 yrs and in Petrol cars offered for 4th and 5th year too
Which Insurance Companies Provide Zero Depreciation Cover
Almost Every Insurance Companies Offers - National Insurance, New India Assurance, United India in PSU and Prominent in Private Players - ICICI Lombard, Bajaj Allianz, Bharti Axa, HDFC Ergo, Tata AIG, L&T General Insurance, Royal Sundaram offers Zero Depreciation Policy