Under the Motor Vehicles Act, 1988, driving an uninsured car on the roads of any state in the United States is illegal. Even if it’s an hour-old car, you need to have or prove possession of a valid insurance cover; otherwise, you’ll be liable to pay substantial fines. Surprisingly, the act mandates having third-party coverage only, which protects the interests of other drivers and passengers.
You’ll need to buy a comprehensive car insurance policy to protect your interests and finances in case of accidents and other misfortunes. To supplement your comprehensive auto insurance and increase the cover benefits, you might need to secure a zero depreciation cover. So, how does comprehensive car insurance compare to zero depreciation cover?
- How Depreciation Rates Compare Between Comprehensive and Zero Depreciation Insurance Covers?
What Is Comprehensive Car Insurance?
A comprehensive car insurance policy covers third-party liability and damages to your car. Your car is prone to damage caused by natural calamities, theft, explosion, and fire, whether you’re using it or not.
Comprehensive automobile insurance comes to your aid protecting your interests and those of third parties in case of such unfortunate events. Costing an average of $134 per year, comprehensive cover is the most preferred auto insurance by brand new and used car buyers.
What Is Zero Depreciation Cover?
Widely known as bumper-to-bumper insurance cover, zero depreciation cover is a custom add-on to a comprehensive auto insurance plan that overlooks the depreciation factor while auto-related insurance claims are being settled.
With zero depreciation coverage, the insurance provider will consider the original cost of replacing car parts or systems. Consequently, you’re going to secure higher insurance settlements even if the car parts have suffered extensive wear and tear.
How Depreciation Rates Compare Between Comprehensive and Zero Depreciation Insurance Covers?
It is essential to realize that when you buy a comprehensive car insurance policy without the zero depreciation policy, you’re going to pay deftly on the depreciation costs if your car needs repairs or maintenance. Trusted comprehensiveinsurance providers factor in the age of the vehicle when settling insurance claims.
If your car is less than six months old, you are in luck because your insurance provider won’t consider the depreciation factor when settling claims. However, once your car hits over six years old, the insurance provider will factor in the depreciation costs, which vary in percentage, depending on the age. Luckily, when you buy an insurance policy with zero depreciation add-on, insurance providers won’t factor in the depreciation factor when settling claims.
Core Differences Between Comprehensive Only and Comprehensive with Zero Depreciation Add-on
When comparing the premium rates of comprehensive cover with zero depreciation insurance cover with comprehensive only policy, you’ll realize that the premiums for comprehensive only are lower by up to 20%. However, comprehensive auto insurance does have limitations on the amount of settlement you can get when you file an auto-related claim. Since the zero depreciation insurance cover doesn’t consider a gazillion factors when settling auto claims, you’re assured of getting higher compensation.
Besides, when you’re seeking a settlement to repair the metal and plastic parts in your car and have comprehensive only insurance cover, your settlement amount will be lower by up to 50%. If you have secured comprehensive with zero depreciation insurance cover, your insurer won’t factor in the depreciation of such parts. That means you are more likely to get 100% compensation rates.
One major issue with comprehensive with zero depreciation insurance cover is that it is only available for cars below five years, while the comprehensive policy is available for all car types regardless of age. Likewise, when you have a comprehensive auto insurance policy with zero depreciation add-on, you will have a limited number of lifetime claims. In contrast, if you have a comprehensive auto insurance policy only, you can make as many claims as possible, provided you haven’t used the policy’s IDV.
Benefits of Getting Comprehensive Cover with Zero Depreciation Over Comprehensive Cover Only
Provided you’re dealing with a trusted comprehensive car insurance provider, you’ll get better premiums, responsible support care, and better claim payouts. However, the insurance settlement payouts depend solely on the insurance policy. Comprehensive auto insurance only policy will cost you a bit lower on the premiums, but all the car depreciation costs will be shifted to you during the settlement. That way, you’ll end up getting up to 50% less compensation than you should.
Comprehensive auto insurance with the zero depreciation add-on offers you three coverage benefits: own damage cover, third-party liability cover, and zero depreciation cover. In a few words, zero depreciation coverage gives you total control over your insurance investment. You’re eligible for a higher payable amount because the insurer won’t consider the age of your car and the rate of damage to different car parts.
On matters of car insurance, you deserve the best, and as you have seen, no insurance policy beats the comprehensive with zero depreciation policy. This insurance policy offers you financial security and protects your best interests if your car is involved in an accident. You won’t only get a higher settlement amount but also avoid spending out-of-pocket money to settle third-party injury and car damage costs.