Most people think of buying a new car and usually get insurance while buying a new car but that insurance contains zero Debt Insurance cover or not. First of all Insurance is necessary, because of this you can claim insurance on the car when it is stolen or has an accident. On making a claim, the insurance company gives you the value of the car based on the years of usage.
As your car gets older, its market value decreases. Over time, car parts wear out and become old. In that, the insurance amount is given according to the market value of the car. But if you want, you can get as much claim return on your old car as on a new car. For that, you have to add on insurance zero dip cover.
What is Zero Debt Insurance Cover?
It is also called Zero Depreciation or Zero Debt Insurance. This is a type of insurance that does not allow a reduction in the sum insured even if the vehicle is old. When you renew your car insurance every year, the sum insured goes down along with the value of the car. But if you add zero dip cover with your vehicle insurance, the value of your car will not decrease.
Understand Zero Debt Insurance Cover with an example
If your car has been damaged in an accident, then the insurance company will calculate the depreciation according to the age and condition of your vehicle. If the insurance company calculates the depreciation rate at 20%, it will give you 20% of Rs 10,000 i.e. the claim amount of Rs. 8,000 will be given.
But if you have taken zero dep insurance, in such a case if your vehicle gets damaged in an accident, the insurance company pays the full amount of the claim. This also includes the cost of damage to vehicle parts.
While taking a motor insurance policy, keep in mind that if zero dep cover is added to the insurance policy, the premium increases by some percentage. If you have bought a new car then you get the option of zero depreciation car insurance. So if you have bought a new car then you should get zero dep insurance as the depreciation in the car or vehicle starts from the date of purchase.
Even if you own a costly luxury car, this is very useful because the parts of expensive cars are also expensive. Apart from this, if you have learned to drive a new car, then you should take zero debt insurance coverage. This will be a profitable deal for you.