95% car buyers opt for zero-depreciation cover: Study
- Mayur Shetty
- TNN Nov 1, 2023, 13:25 IST IST
Zero-depreciation policies have become the top choice for 95% of new car buyers, according to a study by Policybazaar
MUMBAI: Over a decade since their debut, zero-depreciation policies have become the top choice for 95% of new car buyers. Often referred to as bumper to bumper coverage, they do not deduct for part depreciation as vehicles age, which has resulted in increased claim frequency.
In the past, motor insurance claims included a depreciation clause to align with the principle that claimants should not financially benefit from a claim, but this often left them with out-of-pocket expenses despite the intention to cover the replacement value of old parts. Besides deduction for depreciation, the standard motor policy also had deductions for non-metal parts which is not there in zero-depreciation covers.
In the past, motor insurance claims included a depreciation clause to align with the principle that claimants should not financially benefit from a claim, but this often left them with out-of-pocket expenses despite the intention to cover the replacement value of old parts. Besides deduction for depreciation, the standard motor policy also had deductions for non-metal parts which is not there in zero-depreciation covers.
