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What is zero depreciation in car insurance?

Zero dep is the most popular add-on in Motor Comprehensive Policies these days.
Have you ever wondered why Zero Dep is on trend than other add-ons like NCB protection which don’t let the NCB bones decline when you claim? The Biggest reason for Zero Dep to be so popular is because it gives you full claim amount on the parts whose value otherwise have been of less value because of getting old(by years).I am sure you know what depreciation means, it is the sign that our vehicle is getting older, it is the cost that insurance company cut from the whole amount of wear and tear.
However, Zero Dep add-on is highly recommended for wider coverage, But then again there are various factors which shall be considered while buying Zero Dep, add-on.
Like: It increases the premium, it is available for the cars not older than 5 years, then there are restrictions on the no of claims made(which vary insurer to insurer).
Let's see what IRDA guidelines have to say about Zero Depreciation.
By the way, IRDA is the regulatory body which governs all insurance companies
“To protect the policyholders’ interests, to promote, regulate and ensure that the growth of the insurance industry is orderly and for all matters associated therewith or incidental thereto,” that’s IRDA’s mission.
IRDA decides the depreciation rates. Read this Handbook by IRDA for more clarity. 
Anyway, I am sure till now you would be very curious to know what exactly are the benefits of Zero Depreciation Add-on.
Buying a zero dep with the base comprehensive plan can be little expensive, but the savings in case of repairs after an accident may often mitigate this additional cost.
Not just financially but even emotionally it keeps you light-minded at times of difficulties if your car is damaged and require repair.
Even if you already have Motor Insurance Policy, you should definitely check out the rates and coverages of the Comprehensive Motor Insurance Policy with Zero Depreciation add-on on this link easily: http://bit.ly/2DPJm2P

Answers tags 5074  Views   1 kudos 7  Replies Mar 7, 2017

What is the claim procedure under Motor Insurance?

First, check the nearest network garage: 



Sources For Intimation of Claim:
1. Online registration of Claim: https://www.hdfcergo.com/customer-care/claim-intimation.html
2. Call the Toll free: 24x7 customer helpline number 1800 2700 700 (Accessible from India only) and get your claim number.
3. IPO Insurance Portfolio Organiser: HDFC ERGO Mobile App. Download from here: https://www.hdfcergo.com/MobileAppsDownloadPopUp.aspx?type=android


You can opt for any of these :

1. Cashless Claim Procedure: Where the garage and HDFC ERGO have tie up. where you have peace of mind by not paying a huge amount to the garage. 

2. Reimbursement Claim Process: If due to some reason you don't end up in Network garage then you can fix your vehicle from the non-network garage and get your bills reimbursed later.


Don't delay in registering the claim. If you are late they will ask for the reason of delay which should be reasonable.  


Some basic terms used while calculating claim i.e. what makes up the claim amount.

The Repair and replacement costs, less the depreciation value. 

Insurers have provided some additional coverages like a topping on an ice cream, which stops excessive deductions from claim amount like zero dep. 

Consider an example where you have an unfortunate accident causing damage to your vehicle and a component made of fiberglass like the bumper is damaged. 
Total estimated cost 80,000
Standard deduction for depreciation @ 30% 24,000
Other standard deductions (Compulsory deductible) 1,000
Claim payment without Zero Depreciation 55,000
Claim payment with Zero Depreciation 79,000

Answers tags 5021  Views   0 kudos 3  Replies 4 weeks ago

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