ICICI Lombard Zero Depreciation Car Insurance

When we purchase a vehicle, we naturally want to ensure its safety for a lifetime. Although cars are mainly depreciating assets, having zero dep car has become essential. One cannot always depend on public transport to travel from one place to another. Having your car gives you the freedom and flexibility to travel on your terms. With a car comes car insurance. Furthermore, the Indian government has made third-party insurance mandatory for all automobiles on Indian roadways.

How does ICICI Lombard Zero Depreciation Cover Work?

When you buy motor insurance, you naturally want to acquire the best coverage for your vehicle. Having a zero depreciation cover in your car insurance policy is one way of guaranteeing this. But do you know what precisely zero depreciation covers?

A zero depreciation cover, or nil depreciation or bumper to bumper insurance, is a type of add-on cover where the policyholder doesn’t have to pay for the car’s depreciated value during the insurance claim process. As we said earlier, cars are a depreciating asset, and car components are no different. The value of each part decreases over its lifetime. If you do not add zero depreciation cover to your insurance policy, the insurance provider will consider the decreased value of the vehicle and process the claim accordingly. 

Benefits of ICICI Lombard Zero Depreciation Add-on Cover

The benefits of zero depreciation car coverage are as follows:

• It ensures that your insurance provider fully covers the repairs to your vehicle and the damaged replacement parts without deducting the depreciated cost of the components and the car.
• It also helps the policyholder reduce out-of-pocket expenses during the claim settlement process. Policyholders need not shell out extra money when raising a claim.
• If you are the owner of a brand new and expensive vehicle, the ICICI Lombard zero depreciation car insurance policy can help you mitigate financial losses and provide an extra layer of protection.
• It also provides the vehicle owner/policyholder with peace of mind.

Depreciation Rate Applicable on Car with and Without Zero Depreciation Add-on

This is the depreciation rate that happens over time as your vehicle gets older:

The table below also shows the depreciation rate of various car components as set by the insurance regulator, The Insurance Regulatory and Development Authority of India (IRDAI).

What is Included Under an ICICI Lombard Car Insurance Policy with Zero Depreciation Cover?

• An insurance policy with a zero depreciation cover add-on will have a higher premium when compared to a basic third-party insurance policy or a comprehensive car insurance policy.
• The car and car components' depreciated value will not be deducted from the final claim amount during the claim process. The insurance provider will cover the whole amount.
• The ICICI Lombard zero depreciation car insurance will also cover the cost of depreciated parts and components of the insured vehicle, such as tyres, batteries, rubber, nylon, fiberglass parts, etc.

What is not Included Under ICICI Lombard Car Insurance Policy with Zero Depreciation Cover?

The ICICI Lombard zero depreciation car insurance policy does not cover:

• Damage caused due to normal wear and tear.
• It does not deduct the compulsory deductibles included in the vehicle insurance policy.
• The policyholder can file only a certain number of claims within a year.
• If the vehicle owner or driver is driving under the influence of intoxicating substances such as alcohol or drugs.
• If the vehicle's driver is driving without a valid driving licence/policy papers.
• Zero depreciation cover does not cover engine damage due to oil spillage or water infiltration.
• If the vehicle's age is more than 5 years old, the zero depreciation add-on feature is not covered.

Factors Affecting ICICI Lombard Zero Depreciation Cover

Various factors affect your ICICI Lombard zero depreciation car insurance policy. These factors are as follows:

• Age of the vehicle: Your vehicle's age plays an essential part in deciding your insurance premium. Since the zero depreciation add-on is directly related to the aging of your car, your premium will be determined on the same. Most insurance companies, including ICICI Lombard, do not offer zero depreciation cover for cars above 5 years.
• The number of claims is also a deciding factor for your insurance policy premium.
• Model of the car: The type of car and the car manufacturer are also crucial while determining the zero depreciation cover insurance premium. The premium will be on the higher side if you own an expensive vehicle.
• When establishing the amount of your premium, insurance companies take into account a number of criteria. More expensive cities like Mumbai, New Delhi, Bangalore, Pune, Chennai, etc., will attract higher premiums. This is because every city is different, and so are the risks associated with them.