Zero Depreciation Car Insurance cover big hit in India

High depreciation percent on cars have made Zero Depreciation insurance covers or 'zero dep' policies a hit in India recently. The zero dip policy is primarily popular in the mid and top-segment luxury cars in India as most people prefer an enhanced cover added to their standard car insurance policy. Small cars in India however continue to go for the normal standard depreciation insurance policy. As per reports, the depreciation on old cars is as is high as 40 percent depending on the age of the car.  

The Zero Dep policies evolved in 2009 when the insurance regulatory authority in India allowed the car insurance companies to made necessary changes to the standard insurance policies offered by them.

With the new Zero Dep in place, customers need to pay lesser amount for plastic and fibre part. Also, in case of old cars, used cars where the standard policy charged heavily for repairs, the new Zero Dep policy saved lot of pennies. For example, the customer had to pay the entire amount for the bumper or rubber parts in the Standard policy. This amount sometimes climbs to over Rs1 lakh in case of mid or high end luxury cars. In case of a Zero Dep policy, he gets full claim for these parts as well. However, the premium for such Zero Dep policies is around 20 percent more than that of the standard insurance policy. Among the pioneers that introduced the Zero Dep policy is Tata AIG General Insurance that also provides no-claim bonus to the policyholders. Besides, majority of insurance companies have pitched in attractive insurance packages in addition to the Zero Depreciation policy.