When it comes to protecting your car, it’s important to understand your insurance options. Two very useful extras that can greatly enhance your coverage are zero/nil depreciation and roadside assistance (RTI). Let’s look at why these extra protections are so important and how they can give you peace of mind.
What is zero/nil depreciation cover?
Zero/Nil depreciation Coverage is an extra protection for your car insurance. It ensures that you get the full amount of your insurance benefits without any deductions for depreciation. Depreciation is the reduction in your car’s value over time due to normal wear and tear. With regular insurance, the insurance company usually takes depreciation into account and pays you less. For example, if it costs ₹1,000 to fix your car and the depreciation is 20%, you might only get ₹800.
How zero/nil depreciation coverage works:
- Full Coverage: With zero/Nil Depreciation Coverage, you get the full claim amount without any depreciation deduction. This means you can claim the full price of a repair or replacement, which can be particularly beneficial for newer or high-value vehicles.
- Extended benefits: This coverage typically covers both parts and labor costs, making it a comprehensive supplement to your policy.
Why you need zero/nill depreciation coverage:
- Higher insurance payouts: Since depreciation isn’t subtracted, you get more money from your insurance, which is important if repairs are costly.
- Financial safeguard: It helps keep your car’s value intact, which is especially helpful if you want to avoid losing money due to depreciation.
- Peace of mind: Knowing you’re covered for the full repair cost gives you peace of mind and reduces financial worry after an accident.
RTI (Return to Invoice) insurance in auto insurance RTI:
It is an optional vehicle insurance add-on that ensures that if your vehicle is declared a total loss or is stolen, the insurer will reimburse you based on the original invoice price of the car. This means that you will receive the full amount you paid when you bought the car, not just the value written off at the time of the claim.
Why people need RTI coverage:
1. Financial protection: RTI offers greater financial protection by paying out the full cost of buying a new car, along with taxes and registration which can be significant.
2. The Depreciation Shield: As the name suggests this will safeguard you against the amount of depreciation being inflicted on the vehicle, which in terms of overall decrease to a fraction from its original value.
RTI VS Zero Depreciation Coverage:
1. Scope of coverage:
RTI Insurance is equal to the Full invoice price of the vehicle (taxes and registration included) and is paid on total loss or in case of theft. It gives you back what you paid for the car when you bought it.
Zero Depreciation Coverage: Covers the cost of repairs or replacement parts without deducting depreciation. This means that if your car is damaged, the insurance will cover the full cost of the repair without reducing the amount based on the depreciation of the vehicle.
2. Purpose:
RTI Coverage: This type of coverage is meant to repay the whole amount that the car has been bought.
Zero Depreciation Cover: It ensures that you do not incur the expense of devaluation of any of the replaced parts even where you have to incur extra costs on repairs.
3. Claim scenario:
RTI cover: It is especially advantageous in cases where a car has been stolen, or it is declared as total loss meaning no repair is possible.
Zero Depreciation Coverage: It proves beneficial in such situations when a vehicle has been damaged in parts and repair/replacement of these parts is needed.
4. Premium costs:
RTI Coverage: Premium costs are usually high under this approach because the risk taken exposes the insurer to a loss than the revenue.
Zero Depreciation Cover: This also factors into the premium but is however quite low than RTI cover due to additional fees.
Conclusion:
Incorporating Zero/Nil Depreciation and RTI add-on covers into your car policy, can significantly increase your protection and provide comprehensive protection and peace of mind. Zero/Nil Depreciation ensures you are not burdened with depreciation costs during repairs. When choosing car insurance, carefully consider these extras based on your needs and driving habits. Investing in these covers can offer a higher level of security and support, making your driving experience smoother and worry-free.
