Finding the right auto insurance policy has become more important than ever before due to the influx of new vehicles into the market. Analysts recommend that car buyers purchase comprehensive auto insurance, as many states are dealing with rising accident rates. Comprehensive auto insurance helps cover the repairs if your vehicle is stolen or damaged in a unique situation.
Analysts also point out that the Motor Vehicle Act of 1988 mandates that car owners obtain at least a minimum liability coverage level. There is increased demand for luxury cars, which is another reason why it’s recommended that drivers purchase full auto insurance coverage. This article discusses how obtaining zero depreciation car insurance will impact your claims.
- Impact of Depreciation
Many auto insurance companies are now offering zero depreciation insurance as an incentive. Zero depreciation insurance is a potential add-on to your policy that fully covers your vehicle while also eliminating the potential impact of depreciation. It’s well known that cars are rapidly depreciating assets. If you have a car with depreciating value, that will impact your auto insurance policy. Depreciation occurs as your vehicle starts to age. Putting extended miles on your vehicle leads to natural erosion over time.
- Depreciation Rates
Research shows that the depreciation rate is high for rubber parts, batteries, and tubes. The depreciation rate is also high for 10-year-old vehicles. Fiberglass components on vehicles also have a high depreciation rate.
- Zero Depreciation Insurance Benefits
Zero Depreciation auto insurance is added to your policy alongside the payment of an extra premium. The extra coverage ensures that you will receive the full coverage amount if parts on your vehicle need to be replaced or repaired. Traditional auto insurance policies provide coverage for replacement parts based on the depreciation rate outlined in the policy. Zero depreciation insurance does not deduct the depreciation value of damaged parts from your claim.
Many policies offer depreciation reimbursement coverage on vehicles five years old or younger. In rare cases, the depreciation reimbursement may extend to vehicles that are seven years old. Zero depreciation insurance covers your vehicle’s damaged parts during the initial claims filed during the duration of the policy. You also have the option to add zero depreciation insurance to every claim if you are able to pay an extra premium.
- Things to Consider
Analysts point out that adding zero depreciation coverage to your policy is ideal if you would like to maximize your auto insurance and avoid wasting money on depreciating parts. Zero depreciation auto insurance is recommended if you have purchased a new or a luxury car or reside in an area with high crime and accident rates.
Consult With EastEnd Insurance Agency
Adding Zero depreciation coverage to your auto insurance policy could help alleviate potential stress if you have to file a claim in the future. If you have any questions, contact the team here at EastEnd Insurance Agency.