Bajaj Allianz Zero Depreciation Car Insurance Policy

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