Hdfc Ergo Zero Depreciation Add-on
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HDFC ERGO Car Insurance Zero Depreciation
It hurts when your insurance company pays the claim amount after factoring in for the depreciation on your car. However, opting for the Zero Depreciation add-on cover ensures that your insurer offers you the complete coverage amount, i.e., full cover for all the parts of your car sans deduction of the depreciation amount. This means that in the event of your car getting damaged due to any reason including vehicular collision, the insurance company will pay in full the entire cost of your car. This does not cover engine damage caused due to an oil spill or waterlogging. Also, you can buy this cover only if your car is equal to or less than five years old. The premium charges for this cover are high, which means that the policyholders must pay an amount equivalent to 15-20 percent over and above the standard premium rates.
Benefits of HDFC Ergo Zero Depreciation Add-on Cover
Highlighted below are some of the benefits of buying a zero depreciation add-on cover along with your standalone own damage/ comprehensive car insurance plan:
- Increased Protection: A zero depreciation add-on cover offers additional protection to the existing car insurance plan. This add-on cover increases the coverage which is offered under a car insurance plan. Costs incurred because of replacement or repair of car’s insured parts are settled without considering the depreciation value.
- Affordable: Although, by including a zero depreciation add-on cover can increase the premium amount payable towards a car insurance plan, however, it is an extremely beneficial add-on cover as it offers enhanced coverage. With the help of this add-on cover, a policyholder can save money when availing a claim for a car insurance plan as this add-on cover lets the policyholder receive the claim amount without including depreciation cost.
- Claim Amount Without Depreciation: When you include a depreciation cover for your car insurance plan it enhances the coverage of the existing car insurance cover. This add-on assists the policyholder in reducing the chances of paying depreciation expenses from their own pocket when filing a claim for a car insurance plan.
Depreciation Rate Applicable on Car With And Without Zero Depreciation Add-on
Age of Car | Rate of Depreciation Without Zero Depreciation Cover | Rate of Depreciation With Zero Depreciation Cover |
Under 6 months | 0% | 0% |
6 months to 1 year | 5% | 0% |
1-2 years | 10% | 0% |
2-3 years | 15% | 0% |
3-4 years | 25% | 0% |
4-5 years | 35% | 0% |
5-10 years | 40% | 0% |
Above 10 years | 50% | 0% |
Car Part | Rate of Depreciation Without Zero Depreciation Cover | Rate of Depreciation With Zero Depreciation Cover |
Parts made of glass | 100% | 0% |
Rubber/nylon/plastic parts, tyres and tubes, batteries, paint work and airbags | 100% | 50% |
Parts made of fiberglass | 100% | 30% |
What is Included under a HDFC Ergo Car Insurance Policy with Zero Depreciation Cover?
Following are covered under HDFC Ergo car insurance policy with zero depreciation cover:
- A zero depreciation add-on cover offers coverage towards partial damages to tyres and battery.
- Replacement or repair costs incurred by the policyholder during the claim settlement would be offered to the policyholder.
- Compensation/coverage for depreciable car parts like rubber, plastic parts, nylon and fiber is offered to the policyholder.
What is not Included under a HDFC Ergo Car Insurance Policy with Zero Depreciation Cover?
Following are not covered under HDFC Ergo car insurance policy with zero depreciation cover:
- Total loss or damage of the insured car is not covered under a zero depreciation add-on.
- Regular wear and tear or ageing shall not be covered under a car insurance plan with zero depreciation add-on.
- Loss or damage to any uninsured items like tyres, gas kits or a bi-fuel kit is not covered.
- Own damages incurred by the insured car because of mechanical failure or fault is not covered.
Factors Affecting HDFC Ergo Zero Depreciation Cover
Before you opt for a zero depreciation cover, you must keep certain factors in mind.
- You can buy zero depreciation cover only if your car is not more than five years old.
- Replacement of only the depreciated value of the car parts is possible in case of basic zero depreciation car insurance cover.
- Damage caused to the car’s batteries or other parts can also be recovered. However, the coverage is limited as 50 percent depreciation is deducted on car batteries while 30 percent is deductible on other parts of the car made of plastic, rubber or nylon.
- Seeking the benefits of zero depreciation cover involves paying higher premium amounts. Therefore, you must consider buying this only if you are ready to payhigh premium.
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HDFC ERGO Zero Depreciation Cover FAQs
What factors affect the premiums charged towards zero depreciation cover?
The premiums charged towards zero depreciation cover is 15-20 percent more than the standard premium rates. The insurance company calculates the increased premium charges based on factors including:
- Age of the car
- Car model
- Registration locality of your car
Is the claim settlement process different in zero depreciation insurance policy? What is the restriction on the number of claims that can be made?
Zero Depreciation cover is usually bought by new car drivers who are yet to master their driving skills. However, this cover is based on the concept of depreciation that gets deducted from the cover amount. It is important to note that the depreciation on any car is calculated only once a year while new drivers are prone to meet with numerous accidents during the first year. To cut down on the multiple claims made by the insured, the insurance company allows it’s zero depreciation insurance policyholders to make claims only once a year.
Can I seek zero depreciation cover even if my car is more than five years old?
Many insurance companies are reluctant to allow zero-depreciation insurance beyond five years. However, you may still consider seeking approval of the insurance company before paying for this cover. The insurer after looking at your claim history or out of customer loyalty may allow you to avail the benefits of this cover after paying additional premiums.
How is the zero depreciation cover different from the standard cover that one buys?
The biggest difference lies in the amount of coverage settled between the insurance company and the insured. Under the standard comprehensive insurance cover, the insurance company agrees to settle the coverage amount based on the “Insured Declared Value” of the vehicle. Having the “Zero Depreciation Cover” means that the insurer is liable to pay the full coverage amount irrespective of the depreciation amount.
When should you buy a zero depreciation cover?
You must buy this cover if:
- You are driving a new car
- Your is an expensive luxury car
- You live in a densely populated area prone to accidents
- If you have fitted expensive spare parts in your car
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