Zero depreciation insurance does not offer cost effective protection against paint damages, because:
- Zero depreciation insurance covers only accidental damages.
- It does not cover damages like color fading, yellowing, rusting, swirl/washing scratches, key scratches, vandalism, scratches from road derbies, damages from bird drop, etc.
- Since only limited numbers of claims are permissible within a specified time period under zero depreciation insurance, the claims are reserved only for major incidents.
- Even with zero depreciation insurance, the owner has to pay processing fee and service tax, which is a significant amount by itself.
- Premiums payable for zero depreciation insurance are much higher, typically 25% more.
- On claims owner loses his/her bonus and also face increase in premium.
Obviously, dependence on zero depreciation insurance has its own short-comings.
Installing armor film for protecting your vehicle body is far more cost effective.