A joint venture between Bajaj Finserv Limited and Allianz SE, Bajaj Allianz is one of the top motor insurance providers in India. The firm commenced its operations in 2001 and is present in more than 800 cities and towns across India. Bajaj Allianz offers a number of optional riders including Zero Depreciation Cover.
Zero depreciation Cover is a add-on option that allows the policyholder to receive a full claim without depreciation affecting the vehicle parts being replaced/repaired.
Among the riders offered, zero depreciation cover is the most favoured one as it protects the original value of the car parts in addition to the base policy benefits.
Some of the key features of zero depreciation cover are as follows:
The rates of depreciation for each car part is fixed and followed by all the insurers. The depreciation rates are as follows:
The depreciation rate for all the other car parts, including wooden parts are as given below:
|Vehicle’s Age||Depreciation Rate|
|Less than 6 months||0%|
|More than 6 months and less than a year||5%|
|Above 10 years||50%|
Each insurer has a standard procedure to determine the premium for a zero depreciation cover. The following factors are taken into consideration when calculating the premium:
|Parameters||Zero Depreciation Cover||Comprehensive Car Insurance|
|Premium||High Premium||Low Premium|
|Age of Car||Offered to new cars only||Offered to old/new cars irrespective of age|
|Claim Settlement||Complete claim on original value of the car parts||Claim depends on the depreciated value of the car|
|Cost of repair/replacement||Insurer bears the complete expenses||Policyholder may have to bear some of the expenses|
|Policy type||Optional rider policy||Base/standalone policy|