Difference between Comprehensive and Zero Depreciation Insurance
Sanju, a 28 years old Area Sales Manager in an MNC company, bought his dream car after years of saving and hard work. He was very much happy with his car and was also very much concerned about its safety and maintenance.
He also knew that buying third-party insurance is compulsory in India without which driving on the roads will be considered illegal. Therefore Sanju went to his friend Altaf, who was already having a car insurance policy.
After understanding the various benefits and importance of car insurance, Sanju got stuck when Altaf told him about the two options of car insurance, Zero-depreciation insurance, and comprehensive insurance.
He was not able to decide which one will be better for him and what are the various benefits offered in these insurance policies.
This is not only the case with Sanju. Many people in India get confused between comprehensive and zero depreciation insurance because they are not aware of the benefits of these two insurances and that’s why they fail in comparing these insurance products and are not able to choose the best one for them.
In this article, we will look at the major differences between comprehensive and zero depreciation insurance, so that you can choose the best one for yourself, according to your need and situation.
Table Content
Comprehensive Insurance
A comprehensive insurance policy covers loss and damage to your own vehicle caused by certain events like accidents, fire, theft, vandalism, falling objects, etc. In addition, to cover your own vehicle, a comprehensive insurance policy comes with inbuilt third-party insurance protection.
This policy also comes with various add-on options which allow you to widen the area of coverage by paying an extra premium.
Zero Depreciation Insurance
The zero depreciation cover is an add-on that doesn’t consider depreciation on cars. The zero depreciation cover is also known as bumper-to-bumper cover. This cover protects the owner of the car from the depreciation factor due to normal wear and tear which affects the settlement value in case of a claim.
It was introduced in India in the year 2009 and since then it has become very popular and useful among car insurance buyers.
Basic Differences between Comprehensive and Zero Depreciation Policy
Premium Amount
The premium amount of comprehensive insurance is generally lower than zero depreciation insurance.
Claim Settlement
Zero depreciation, insurance offers settlement coverage without considering the rate of depreciation while in the comprehensive insurance policy, the claim amount is given on the current value of the vehicle which includes the rate of depreciation.
Repairing and Plastic Parts
In the case of zero depreciation cover the insurance company covers the maximum cost of repairing and plastic parts while in comprehensive insurance, the policyholder has to pay more from his own pocket.
Age of the Car Covered
The zero depreciation insurance gives cover for new cars only (up to 5 years old) while comprehensive insurance gives cover for cars that are less than 15 years old.
A comprehensive Insurance Policy is ideal for
A comprehensive insurance policy is ideal for those people who are looking for complete protection of their car because the coverage area of a comprehensive insurance policy is very wide. It is also recommended for those people who are not much concerned about the depreciation rate which will lower the amount of money received under the policy.
The zero Depreciation Policy is ideal for
A zero depreciation policy is ideal for those people who want coverage without worrying about depreciation. This insurance can also be taken by those people who don’t want to lose money due to depreciation while making the claim.
Both zero depreciation insurance and comprehensive insurance have their own pros and cons. The decision of choosing between these two is all based upon your need and situation. But to choose the best one, you need to understand both the policies well. So, analyze the above-mentioned differences and features of both policies and then choose the best one for yourself.
Article could have covered the actual difference of premium in comprehensive and zero dep policies. Similarly in zero dep policy there is another condition that zero dep is applicable up to two claims only, thereafter the policy become comprehensive cover policy and depreciation is charged.
Whether zero depreciation policy covers third party claim as well??
what is covered under comprehensive and zero depreciation plans.kindly clear it to decide. which insurance company is best among all and why.
if cx is looking for zero dep but cx vehicle is more then 5 year so how to convency cx to take comprehenshive plan .
I am balaram I owned cellerio automatic Ts 04 5872 recently damaged maruthi authorisedealer he claimed rs 70 0000/_ I have nil dip insurance how much I get