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Depreciation Shield in Car Insurance
Nov 29, 2023

Depreciation Shield in Car Insurance: Benefits and Importance During Renewal

Motor insurance has different types, among them being car insurance. It is a vital financial safeguard for vehicle owners. It provides coverage against various risks, including accidents, theft, and natural calamities. One essential aspect of car insurance that often goes unnoticed but can make a significant difference in the event of a claim is the depreciation shield, particularly in the context of zero depreciation car insurance. Let’s explore what zero depreciation means and look at some of its benefits.

Depreciation in Car Insurance

In the world of motor insurance, depreciation refers to the reduction in the value of a vehicle and its parts over time due to wear and tear. When you file a claim for damages or repairs to your car, the insurance company usually considers this depreciation factor when calculating the claim amount. This means you may receive a reduced pay-out based on the depreciated value of the damaged parts, leaving you with out-of-pocket expenses.

Depreciation Shield In Car Insurance

Zero dep car insurance, also known as 'Zero Dep' insurance, is an add-on coverage option that eliminates or significantly reduces the depreciation factor when calculating claim settlements. In simple terms, it ensures you receive the full cost of repairing or replacing damaged car parts without the reduction due to depreciation. Claims are subject to terms and conditions set forth under motor insurance policy.*

Working Of Zero Depreciation Insurance

With depreciation shield in car insurance, the insurance company covers the entire cost of repairs or replacement of damaged parts without factoring in depreciation. This means you receive a higher claim amount, ensuring you don't have to bear the depreciated portion of the expenses. Claims are subject to terms and conditions set forth under motor insurance policy.* Since the cover is an add-on in the comprehensive insurance, the premium of the policy increases. However, the added cost is often justified by the peace of mind and financial protection it offers during claim settlements.

Advantages of Depreciation Shield In Car Insurance

Opting for depreciation shield in car insurance offers several advantages for vehicle owners:

Complete Coverage

Zero dep car insurance provides comprehensive coverage for your car, ensuring you receive full compensation for repairs or replacement of damaged parts. This ensures your car’s functioning does not get impacted, especially if the car is being used on a regular basis.*

Lower Out-of-Pocket Expenses

Without the impact of depreciation, you won't have to pay for the depreciated portion of the repair or replacement cost. This means lower out-of-pocket expenses during claim settlements.*

Peace of Mind

It offers peace of mind, knowing you won't have to worry about depreciation affecting your claim pay-outs in case of damage or accidents.*

Faster Claim Settlements

Since the add-on simplifies claim settlements by eliminating the need to calculate depreciation, claims might get processed faster, allowing you to get back on the road sooner.*

Importance During Insurance Renewal

Car insurance renewal is an opportunity to assess your existing policy and make necessary adjustments to ensure you have adequate coverage. If your policy is standard and you wish to upgrade the policy, or if you have a comprehensive policy but do not have depreciation shield in your car insurance, here’s why you should consider adding it during renewal:

Continued Protection

If you already have zero depreciation coverage, renewing it ensures you maintain continuous protection against depreciation-related reductions in claim settlements.*

Upgraded Coverage

If you previously had a car insurance policy without the add-on in it in the first place, renewing with zero depreciation coverage allows you to upgrade and enjoy the benefits of full coverage for car repairs and replacements.*

Enhanced Financial Security

With the costs of car parts and repairs increasing over time, zero depreciation coverage becomes even more valuable during car insurance renewal. It shields you from rising repair costs.* Budgetary Considerations Assess your budget and evaluate whether the slightly higher premium for zero depreciation coverage aligns with your financial plans. It's often a worthwhile investment for long-term financial security.*


Zero dep car insurance is a valuable add-on for vehicle owners seeking comprehensive financial protection. As a policyholder, it is important take the time to assess your coverage needs and consider opting for the add-on to continue enjoying complete protection and financial security on the road. Ultimately, the choice of whether to include a depreciation shield in your policy is a decision that can provide long-term peace of mind and financial stability for your vehicle. *Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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