Team-BHP (https://www.team-bhp.com/forum/)

-   Indian Car Loans & Insurance (https://www.team-bhp.com/forum/indian-car-loans-insurance/)

-   -   Is a Zero Depreciation add-on really necessary in the 1st year? (https://www.team-bhp.com/forum/indian-car-loans-insurance/270679-zero-depreciation-add-really-necessary-1st-year-2.html)

You absolutely do have a choice. It is not on them to have the booking be conditional.
Speak with them again and be firm and if they are still adamant, find another Maruti dealer. They are dime a dozen.


I'll just end up repeating what others have said. Just get Zero dep first year onwards.
It really does seem the higher, rather inflated, insurance cost is what is actually bothering you. You are basically willing to go for a lower tier of insurance to satisfy the dealers demand. Again a problem easily remedied If you try harder.

That is just a nasty arm-twisting tactic by the dealer. As suggested by BHP-ian Maky, please check out other Maruti dealerships and get out of this deal. The dealership is milking your desire for a particular variant and trying to pull a fast one on you hoping that your desperation for this variant will be enough to make you agree to whatever horrible terms they set for you. Please do not be coerced into buying accessories that you don't need either.

I think your reluctance mostly stems from the fact that you do not wish to negotiate with the dealer, because there are cheaper deals to be had. I did a quick check online and as other members have already mentioned, 15K for a zero-dep add-on is simply too much.

To answer your question specifically though, please read the section on "How Much do You Pay from Your Pocket in Case of Claim?" at this link: https://www.coverfox.com/car-insuran...-depreciation/
You have partially answered your own question - the standard comprehensive policy will cover most, but not all of the damages.

Ultimately, insurance is about covering risks. If you think that you will be driving around in a low-risk area, especially in the first year, then perhaps you can do without this add-on. That's a decision for you to take. However if you can negotiate a lower cost, perhaps it will make the decision more palatable financially. Hence the advice from fellow members to negotiate a better deal for yourself.

I am from insurance sector and let me give you an important view.
Actually that 5% to 15% depreciation on a car with age below 1 year is applicable only for the metal parts. For plastic, rubber and fiber parts, the depreciation is 50% right from day 1 of the car's age. And with almost all cars, in case of a frontal or rear collision, there are a lot of parts made of plastic and fiber and ultimately you might be spending 50% of the bill as your share since insurance company will provide claim after deducting depreciation. It's therefore a wise decision to go with Nil depreciation cover right from the beginning and continuing it as long as possible.

Sir with all due respect, what you have mentioned as unethical is not so. The depreciation rates for various parts of a car are as below.
1. Plastic, Rubber, Fiber parts - 50% irrespective of the age.
2. Glass - 0% depreciation ( Whatever the age of car is, you will get full claim for the glass irrespective of you have taken nil depreciation add on or not)
3. Metal parts - Age based depreciation from 5% to 50%

I hope this will be useful for all going with insurance claim. With respect to what you have mentioned as unethical practice by insurance company, the depreciation rates are not set by individual companies. These are defined in India Motor Tariff - as per motor vehicles act 1988 and further amendments. Kindly don't call some practice outrightly unethical without backing. Have a nice day.

In my opinion it is unethical. Insurance companies employ dubious strategies to deny claims. I am so fed up with dealing with them that I refuse to accept any work that involves insurance claims. In any case the insured value of a car is reduced as they age. So why should a part be valued at 50% from day 1? Almost anyone who takes an insurance company to court wins.

I was told by my agent that the zero depreciation cover should be from the start. If there is a break in zero-dep coverage, the insurance provider will not honor it (even if it is part of the insurance addon). Is this the case?

Hi. Since you are from the insurance sector, had a query, slightly off-topic. Earlier, you could switch insurance providers on renewal even if made a claim and retain NCB. Is is still the same? Or is there a central tracking mechanism in place now?

To each their own. It is your opinion then. I just wanted to state the fact. I rest my case:)

The option to switch insurers on renewal is still available. But as you have said there is indeed a central tracking available now to get claim history of the vehicle by Insurance Information Bureau. So every insurer checks for the validity of NCB before settling the claim. If it is found that the current NCB is not valid due to claim in previous policy, then the value of the NCB will be recovered from the insured.
Moreover as per recent IRDAI circular, if it is found that the insured has misrepresented the NCB inspite of having made a claim in the previous policy, and a claim arises in the current year, then the claim will also be reduced by that percentage.
For example, if I had 50% NCB in my previous policy and made a claim at the last month of the insurance, ideally upon renewal my NCB will become 0.
If I have misinformed the new insurer regarding this claim and continued to avail 50% NCB, then if a claim arises for say about 1 lac, then the claim will be reduced to 50,000 (50% NCB misrepresentation hence 50% reduced). In addition, the premium reduced due to 50% NCB initially will also be recovered ( If my premium paid with 50% Ncb is 10,000 and if without NCB it is 15000, then that 5000 additional amount will also be recovered)

Hi VishJ, could you please comment on my query about zero-dep. Thanks

I was told by my agent that the zero depreciation cover should be from the start. If there is a break in zero-dep coverage, the insurance provider will not honor it (even if it is part of the insurance addon). Is this the case?

The answer for your question is both yes and no. Let me explain.

Generally now for a new car, what we get is 1 year comprehensive insurance (Own Damage) and 3 years third party cover. The option to take zero dep for the first year comprehensive insurance is purely with the insured.
Now I said yes because even if you don't choose nil depreciation cover in the first year, you can definitely take nil dep on 2nd year own damage only insurance.
And I said no because certain companies won't offer Nil depreciation cover on renewal if the previous insurance doesn't has the said cover. It is based on their internal circular since that freedom is given to the insurance companies by IRDAI.

Now to make things easier, you can avail nil depreciation cover on 2nd year renewal even with non nil dep policies if you pick any of the PSU insurance companies since they provide Nil dep without any restrictions till 3 years of the vehicle age.
Private companies also offer this benefit but it changes frequently based on their financial results.

As a end note, all this above confusion is not needed since for a new car, a nil dep cover will hardly cost 5000 rupees more than normal cover. So the premium is well worth it compared to the risks involved.

And regarding the renewals, if you have nil depreciation cover from the start, you can very well renew it with same benefit at least till 5 years irrespective of the claims made. Some companies offer nil dep renewal upto even 7 years.

During renewal, insurance company may not provide zero dep cover if it was not taken in the prior year. Please be mindful of this fact before ommiting this for new vehicle. In fact, many add-on covers like zero dep, RTI etc needs continuity otherwise theses won't be offered during future renewals.

Forget a zero-dep, I would say even get the RTI included right from Day 1 which majority of the buyers don't! You never know what might be waiting for you in-store.

As a matter of fact , I opted for a zero-dep even in the 7th year for my Creta. I know the premium the was huge (almost double); but that peace-of-mind is worth it. Hyundai / Kia spare parts are crazy expensive!!

From what I know, if you skip zero dep in the first year, you will not be able to get it for the 2nd year onwards.

Another example, if you skip the zero dep on the 2nd year and want it again in 3rd year, you won't get it. So, the zero dep has to be continued, and should not be skipped at the start or in between if you want it for, let's say, 3rd, 4th years.

I'm able to add a zero dep cover while renewing my 2015 Tata Nano insurance policy with several insurance companies, even though my existing insurance policy doesn't have zero dep. Does it mean that they will refuse zero dep in case of a claim, even after collecting the premium for the same? Nowhere do they ask if my existing policy has a zero dep cover; the only input taken is the % NCB and whether a claim was made in the current year :confused:

If they have issued the policy with zero add-on mentioned then I guess that's valid. May be, Digit doesn't ask for prior add-on cover info.

But during renewal of my car with companies like icici /hdfc, it used to always ask me to confirm if previous policy had zero dep.