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Depreciation Cover for Your Automobile

11 Feb 2019

Car Insurance Article

A car is an asset that depreciates with time. Depreciation has an impact on your claims in case of an accident. One might assume that comprehensive car insurance will eliminate any out of pocket expenses, but you are wrong. Whenever you file a claim for car insurance, the insurance company will determine the amount payable after considering depreciation. This means you will have to pay a portion of the total cost incurred for replacement of parts during repair. If you want to ensure that the impact of depreciation does not reduce your claim amount, you need to opt for a zero depreciation cover.

What is a Zero Depreciation Cover?

It covers the depreciation amount deducted on the value of parts replaced as a result of a possible claim under Own Damage Section (Section I) of policy. When a car is damaged because of an accident, and you make an OD claim, the insurance company will not reduce the amount of depreciation from the claim amount if you have zero dep or nil dep cover.

Difference between a standard comprehensive Policy and Policy with depreciation cover Add-on

There is an obvious difference between both the types of insurance cover. A depreciation cover will provide the coverage of claim amount deducted on account of depreciation. In contrast, a standard comprehensive cover will not offer zero-depreciation, and your claim amount will be estimated after deduction of depreciation applicable to the parts as per the vehicle age. If your car is involved in an accident, the standard policy will subtract the amount of depreciation and then pay you the claim amount whereas a depreciation cover will pay the amount including depreciation amount.

Is it worth it?

There is no denying the fact that a depreciation cover has advantages over a standard policy and it comes with a cost. You are paying an additional premium to ensure that you do not have to bear out of pocket expenses in case of a claim in the future. Those consumers who do not mind paying a higher premium but want peace of mind should opt for this cover.

Should you buy the cover?

If you have a new vehicle, this add-on will be worth the additional cost. There are instances where even the most careful and experienced drivers have ended up in an accident because the other guy was not careful. You never know what will happen on the next turn and this is why it is best to opt for a policy that will provide you with a deprecation cover.

If the additional premium does not pinch you, this is a good cover for any car owner. Consider the benefits of the cover and weigh it with the cost. A depreciation cover will give you complete peace of mind.

It is equally essential that you get the right auto insurance policy as that is going to be a real boon in various situations. That is why you may want to consider an auto insurance policy from Liberty General Insurance. For those applying for the insurance policy for the first time, click here. Existing users may click here.

Disclaimer: For more details on risk factors, terms & conditions please read sales brochure carefully before concluding a sale. *The discount amount will vary subject to vehicle specification and place of registration.

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