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Difference between own damage and zero depreciation car insurance - RK store

Introduction

You might have heard of the terms 'own damage' and 'zero depreciation' car insurance, but what do they actually mean? And which one is right for you?


Here we'll break down the differences between the two, so you can make an informed decision about which type of car insurance is best for you.

Difference between own damage and zero depreciation car insurance


What Is the Difference Between Own Damage and Zero Depreciation Car Insurance?

  • When it comes to car insurance, there are two main types: own damage and zero depreciation. But what's the difference between the two?
  • Own damage insurance covers you for damages that you cause to your car. So, if you accidentally back into a parked car, your own damage insurance will cover the cost of repairs.
  • Zero depreciation car insurance, on the other hand, covers you for damages to your car, regardless of when they occurred. So, even if your car is a few years old, you'll still be covered for damages.


How Do These Two Types of Car Insurance Work?

When you're shopping for car insurance, you'll come across two types of coverage: own damage and zero depreciation. So what's the difference between the two?


Own damage insurance is pretty straightforward. It covers the cost of repairs to your car in the event that it's damaged in an accident. But here's where zero depreciation comes in.


Zero depreciation insurance covers the cost of repairs to your car, PLUS the cost of depreciation. What does that mean? Well, let's say you get into an accident and your car needs to be repaired. The repair bill is $5,000, but your car has depreciated in value by $2,000 since you bought it.


With own damage insurance, you would only be reimbursed for the $3,000 cost of repairs. With zero depreciation insurance, on the other hand, you would be reimbursed for the full $5,000 repair bill.


Which Is Better for You?

So, you're trying to decide whether to go with own damage or zero depreciation car insurance. And you're not sure which is the right choice for you.

Here is a quick breakdown of the differences between the two to help you choose the best one:

  • With own damage insurance, you'll be reimbursed for the cost of repairing or replacing your car if it's damaged in an accident.
  • With zero depreciation insurance, you won't be reimbursed for the cost of repairs, but you will be compensated for the full value of your car if it's written off.


So, which is better for you? Well, it depends on your budget and your needs. If you're someone who likes to keep their car in pristine condition, then zero depreciation insurance might be a better option for you. But if you don't mind a few scratches and dents, then own damage insurance could be a more cost-effective choice.


How Much Does Each Type of Car Insurance Cost?

When it comes to car insurance, there are two main types: own damage and zero depreciation. But which one is right for you?


Zero depreciation insurance is designed to provide complete protection against depreciation. So if your car is damaged, the insurer will reimburse you for the full cost of repair, regardless of how much the car has depreciated.


On the other hand, own damage insurance covers you for the actual cost of repairing or replacing your car, minus any depreciation. This means that if your car is damaged, you'll only be reimbursed for the cost of repair or replacement up to the amount that the car has depreciated.


So which type of insurance is right for you now? It depends on your needs and budget. Zero depreciation insurance tends to be more expensive than own damage insurance, but it's worth considering if you want complete protection against depreciation.


What Are the Benefits and Drawbacks of Each Type of Car Insurance?

There are a few key benefits and drawbacks to each type of car insurance. Let's start with own damage insurance.


The main benefit of own damage insurance is that you're covered in the event of a collision, no matter who is at fault. This can be really helpful in situations where the other driver isn't insured or when it's difficult to track them down.

  1. The downside of own damage insurance is that you're typically limited to the value of the car.
  2. So if your car is totaled, you'll only receive the replacement value, minus your deductible.
  3. Now let's look at zero depreciation car insurance.
  4. The main benefit of zero depreciation car insurance is that you're covered for the full value of your car, no matter how much it has depreciated.
  5. This can be really helpful if your car is new or has high-value features.
  6. The downside of zero depreciation car insurance is that it usually comes with a higher premium.


Which Car Insurance Companies Offer These Types of Insurance?

You might be wondering which car insurance companies offer these types of insurance. Own damage insurance and zero depreciation insurance are two different types of car insurance, and each company has their own policies when it comes to these types of coverage.


Some companies might only offer one or the other, while others might offer both. So if you're interested in either of these types of coverage, you'll need to do some research and compare different companies to see who offers the best rates.


Conclusion

There are a few key differences between own damage and zero depreciation car insurance. The most obvious one is that own damage will pay for the repairs to your car if it is damaged in an accident, while zero depreciation will not.


However, there are other benefits to both of these types of policies. Own damage will usually come with a higher payout limit, meaning you can claim more for repairs if needed. Zero depreciation, on the other hand, tends to be a bit cheaper than other types of car insurance.


So, which one is right for you? That depends on your needs and budget. Speak to an adviser at your car insurance company to find out more about the options available to you.