• Bajaj Allianz Zero Depreciation Car Insurance Policy

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    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.

    Why Bajaj Allianz 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.

    Key Features of Bajaj Allianz Zero Depreciation Cover

    Some of the key features of zero depreciation cover are as follows:

    • Normal wear and tear and mechanical breakdown is not covered
    • You need to pay an additional premium to avail this cover
    • If a claim is not admissible, even partially, you cannot raise a claim request
    • Restricted number of claims allowed during the policy tenure
    • Exclusive of Engine Protector Cover
    • The cover is available for new cars alone

    Depreciation Rates for car parts

    The rates of depreciation for each car part is fixed and followed by all the insurers. The depreciation rates are as follows:

    • 50% depreciation rate for parts that exhibit high wear and tear, such as rubber/plastic parts, batteries, tyres/tubes, etc.
    • 30% depreciation rate on fiberglass parts.
    • 0%-50% depreciation rate on metallic parts, based on the vehicle’s age.
    • 50% depreciation rate on paint job.

    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%
    1-2 years 10%
    2-3 years 15%
    3-4 years 25%
    4-5 years 35%
    5-10 years 40%
    Above 10 years 50%

    How is the Premium for Bajaj Allianz Zero Depreciation Cover Calculated?

    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:

    • Age of the car
    • Make and model of the vehicle
    • Geographical location where the policy was issued

    Zero Depreciation Cover Vs Comprehensive Car Insurance Policy

    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

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