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Understanding ZD, EP, & CM in car insurance? (In very Simple Terms)

Ever wondered what are the multiple add-on covers provided in car insurance? Well, you have come to the right place.

Let us talk about the following:-

  • Zero depreciation cover (ZD)
  • Engine protection cover (EP)
  • Consumables cover (CM)
  • Personal liability cover (PL)
  • Key protector cover (KP)

Zero depreciation cover (ZD)

When opting for a Zero/nil depreciation cover, the insurance company is entitled to settle the claim amount without taking the depreciation cost of various parts of the car into consideration. This particular cover helps the policyholder claim the full amount for car parts that would depreciate due to normal wear and tear, or in case of any accidental damage.

Engine Protection cover (EP)

This particular add-on cover insures the policyholder against any losses due to damages or breakdown of the car engine. It covers the costs of expenses arising out of any mechanical/ electrical breakdown of the insured’s. This cover insures parts like gearbox, piston, crankshaft, etc against any damage.

Consumables cover (CM)

This add-on cover in the car insurance policy pays for consumable items used in the maintenance of cars like air conditioner’s gas, grease, engine oil, fuel oil, lubricant clip, break oil, filter oil, bolts, screws, nuts, etc.

This cover can help the policyholder save a lot of money for consumable items that are used in the daily maintenance of the car at just a little extra premium.

Personal Liability cover (PL)

Personal liability coverage comes into play when the policyholder is at fault in an accident. It covers the medical costs of the opposite driver and the passengers.

Note that this cover will not provide any compensation for the insured’s car or the cost of his medical expenses in case of any injury.

A simple example of Personal Liability cover (PL)

Let us assume that Mr. Subhash has opted for a personal liability cover along with a comprehensive car policy.
Further, let’s assume that Mr. Subhash accidentally breaks the signal and runs his car into another person, injuring another driver and causing him a fracture.

Since Mr. Subhash had opted for a personal liability cover, the insurance company will be liable to cover medical expenses of the driver as well and the car damages.

Key Protector cover (KP)

As the name suggests, this cover reimburses the policyholder in case of any loss, theft, or damage to the insured’s car key. One should bear in mind that the KP rider is an additional rider that the insurance company offers in charge of some extra premium.

A simple example of KP in car insurance

Mr. Kapoor purchased a KP rider along with a comprehensive car insurance policy. A few weeks later he lost his car keys. As he opted for a KP rider, the company is liable to pay him compensation for his lost keys.

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Frequently asked questions about factory and warehouse insurance

  • Is it compulsory to buy add-on covers in car insurance policy?

    No, it is not compulsory to buy an add-on cover, although it is recommended, as it will provide the policyholder a higher blanket of safety towards their vehicle.

  • Are add-on covers widely available?

    Yes, add-on covers are widely offered by many insurance companies.

  • Can we buy multiple add- on covers at one time?

    Yes, you can opt for multiple add-on covers depending on your requirements.

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