After finalizing your desired car, the next crucial choice is its insurance cover. The Motor Vehicles Act of 1988 lays down the mandatory requirement for all vehicle owners to have insurance coverage, including car owners. Thus, it would help to make an informed decision about your car insurance policy. There are two alternatives to car insurance plans – a third-party cover or a comprehensive approach. As the name suggests, a third-party plan covers the legal liabilities due to a third person. Injuries to such persons and property damage are both included under the third-party cover.

For this reason, third-party plans are also known as liability-only policies. This is where a comprehensive plan has the upper hand as it protects your vehicle against damages. This complete car insurance policy includes third-party cover, own-damage cover, and a personal accident cover. While a liability-only plan offers limited coverage, they provide no coverage of your car. So, if your car is damaged due to a natural disaster or any other artificial event, the insurance company offers financial assistance for its repairs.

However, comprehensive plans also have certain limitations, just like any other insurance policy. These policies do not pay for the entire cost of replacement or repairs required. They account for depreciation at the time of pay-out. Like any other equipment, depreciation on cars reduces value due to the passage of time. Thus, the entire cost of repairs is not compensated for. Different parts having different percentages of calculating depreciation, like tires, tubes, plastic, rubber, or nylon parts, are depreciated at the rate of 50%, whereas fiberglass spares are depreciated at 30%. * Standard T&C Apply

To combat such depreciation eating up the amount of compensation of your car insurance plan, add-ons can come in handy. One specific add-on that works, in the long run, is the zero-depreciation add-on. With this add-on facility, any effect of depreciation shall be ignored at the time of claim, thereby offering maximum pay-out for any repair or replacement. Thus, the insurance company compensates for the entire cost of spares required in the product. * Standard T&C Apply Here are four things you need to know about a zero-depreciation add-on cover:

1. The zero depreciation cover is an add-on facility offered by your insurer that can be opted for voluntarily. Since it is an optional feature to a comprehensive plan, it comes at an additional premium.
2. This zero-depreciation cover is only available for cars not older than five years old. Thus, if you have an older car, this add-on cover may not be available at the time of car insurance renewal.
3. Zero depreciation, commonly referred to as a nil depreciation cover, specifies how many claims can be made during the policy tenure. This is based on the insurance contract terms and must be confirmed before buying.
4. This add-on cover can only be clubbed with a comprehensive policy and is not available with third-party policies.

*Standard T&C Apply

With the above details laid down, make sure to purchase a zero-depreciation cover smartly. A car insurance calculator is a nifty tool that can come in handy to assess the impact of such an add-on on your policy premium. Remember that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.