Advantages of auto insurance policy without depreciation

Car insurance policy

See the full list of benefits that come with a No Depreciation auto insurance policy

Zero amortization, also known as zero amortization or Bumper to Bumper car insurance, is an auto insurance policy that excludes the depreciation factor from coverage, giving you full coverage. This means that if your car is damaged as a result of a collision, no depreciation is subtracted from the cover for wear and tear on parts of the car’s bodywork (excluding tires and batteries). The insurance company will pay the full cost of replacing the body part. *

* Terms and conditions apply

Bajaj Allianz General Insurance Company policies do not provide for any amortization car insurance with 100% coverage for all fiber, rubber and metal parts, with no depreciation deduction. It does not cover engine damage due to water infiltration or oil leakage. Any mechanical breakdown, oil change or consumables are also not covered by this policy. The policy comes with a limit on the number of claims you can make in a year. The zero amortization guarantee provides full coverage for the repair/replacement of the following parts of your car: fiber, rubber, metal, glass and plastic parts. *

* Terms and conditions apply

Auto insurance without depreciation

Benefits of Zero Amortization

Zero amortization coverage saves you from paying a large sum for the repair/replacement of parts of your car, following an accident, that you would have to pay otherwise. Without a zero depreciation supplement, the financial compensation you receive is obtained after deducting the depreciation value of the car. This means that you receive a reduced claim amount. This addition covers the difference between the actual cost of the repair and the amount deducted from the claim. *

  • With a zero amortization cover, you get a maximum settlement of the amount of your claim. You only have to bear the cost of the compulsory levy. *
  • Zero amortization coverage provides coverage for your car in addition to that provided by your existing car insurance policy. *
  • Zero amortization coverage helps increase your savings when you file an auto insurance claim. *

* Terms and conditions apply

Factors to consider before buying car insurance without depreciation

  • You should check the exclusions of zero amortization coverage before you decide to purchase it. Some of the generic exclusions are: *
  • Engine damage due to water ingress or oil leakage*
  • Mechanical failure *
  • Damage caused by normal wear and tear*
  • Damage to uninsured items*
  • Complete/total loss of the vehicle *
  • You should check the number of times you can make a car insurance claim after purchasing zero amortization coverage. Most companies don’t allow you to make more than 2 claims in your policy year if you’ve opted for zero amortization coverage with your normal car insurance policy. *

* Terms and conditions apply

Why You Should Get Zero Amortization Coverage

  • Your car is new (less than 5 years old)

The depreciation value of a car increases rapidly during the first five years. After the first six months, the level of amortization is already 5%. By the 3rd year, the level of depreciation increases to 30%, reaching a staggering 50% in the fifth year of the car. Therefore, buying a zero amortization add-on, at least for the first few years, can prove beneficial. *

Luxury cars come with heavy repair costs. Adding zero depreciation can be a useful aid in dealing with these high costs. *

  • You live in an accident-prone area

The likelihood of you making claims is higher if you live in an accident-prone area, whether man-made or natural. However, receiving a reduced claim amount due to the depreciation deduction each time may not make financial sense, as you are not fully compensated. This can be avoided with the help of a zero amortization car insurance add-on. You have very expensive spare parts installed in your car. *

* Terms and conditions apply

Repairing expensive replacement parts can be heavy on your pockets. Even sourcing these spare parts can be difficult. However, this difficulty can be alleviated when one receives the full amount of the claim, disregarding depreciation.

Insurance is the subject of the solicitation. For full details of benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before making a sale.


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Justin D. O'Neill