Common Misconceptions Regarding Zero Depreciation Car Insurance

When it comes to buying or renewing car insurance, most people come across the term zero depreciation cover. Some think of it as an unnecessary upgrade. Others assume it's already built into their comprehensive car insurance plan. Both ideas are common—and both are misleading. These misconceptions around zero dep often lead to confusion and dissatisfaction, especially when it's time to file a claim. This article aims to unpack some of the most common misunderstandings around zero depreciation car insurance, so you know exactly what it does—and what it doesn't.

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Why is Timely Renewal of Zurich Kotak Car Insurance Important?

A valid car insurance package is necessary to protect your finances and follow the motor vehicle law. This could mean that it will cost a lot to fix if something goes wrong or is stolen. In India, it is also illegal to drive without third-party car insurance. So, updating your car insurance policy on time is very important.

What is Zero Depreciation Car Insurance?

Zero depreciation in car insurance, is an essential add-on cover that ensures that the insurance company does not factor in the depreciation of the car or its parts at the time of claim. The zero dep is also known as nil depreciation insurance or bumper to bumper protection cover. You can opt for zero dep add on with your own damage or comprehensive car insurance policy.

What Does Zero Depreciation Car Insurance Cover?

To understand the myths, we must first clarify the basics.

Depreciation is factored in in a standard comprehensive car insurance policy while calculating your claim. This means the older your car—or its parts—the less insurance amount you get when a replacement is needed. The value is reduced according to how long the vehicle or parts have been in use.

Now, if you choose to add a zero depreciation car insurance cover, the insurer agrees to pay the full cost of replaced parts without considering wear and tear. It ensures that your payout during a claim isn't reduced due to depreciation, subject to terms and limits specified in the policy.

Let's clear the misconceptions around zero depreciation car insurance add-on now.

Misconception 1: Comprehensive Insurance Automatically Includes It

This is one of the most common errors car owners make. Many believe that a comprehensive car insurance policy includes every possible benefit, including zero depreciation. In truth, this add-on is not bundled with the standard plan.

If you haven't actively selected and paid for this cover, your insurer will still deduct depreciation from your claim amount.

Misconception 2: Zero Depreciation Means You Will Get 100% of Every Claim

It is tempting to think so, but it is not that straightforward.

The zero depreciation add-on removes depreciation from the equation—but that doesn't mean the insurer pays for everything. Certain expenses are still outside its scope, such as:

• Engine damage caused by water ingress or oil leakage, unless separately covered.
• Normal wear and tear.
• Cost of consumables like brake fluid or coolant, unless an add-on is taken.
• Mechanical breakdowns that are not linked to any accident.

The benefit applies only to accident-related part replacements, and even then, within specific conditions.

Misconception 3: It's Too Expensive to Make Sense

This is often said without checking the actual numbers.

Yes, a zero depreciation add-on cover raises your premium slightly. The increase is usually 15% to 20%, depending on the vehicle's make and model. But if you factor in the costs of a single accident, the value becomes clear.

Consider this:

• A bumper-to-bumper accident may cost ₹40,000 in part replacements.
• A regular policy may only cover ₹28,000 after depreciation.
• With zero depreciation, you could recover the full ₹40,000.

That's ₹12,000 recovered—often more than the extra premium paid.

Misconception 4: It Is Meant Only for New Vehicles

This cover is primarily offered for relatively new cars, but not exclusively.

Most insurers allow this cover for cars up to five years old. Depending on their underwriting policies, some might even extend eligibility up to seven years. So if your vehicle is three or four years old, you could still opt for a zero depreciation insurance add-on.

It's always worth checking with your insurer instead of assuming you're not eligible.

Misconception 5: You Can Claim As Many Times As You Like

It's easy to assume that once you have added zero depreciation insurance cover to your base policy, you are covered for every bump and scratch, no matter how often. While the idea of unlimited claims sounds reassuring, that's not how it works.

Most car insurance companies set a limit—usually two zero depreciation claims in a policy year. A few premium plans might offer more, but there's almost always a cap.

Once you exhaust the allowed claims, any additional ones will be subject to regular depreciation.

Misconception 6: It Covers All Accident-Related Costs

A zero depreciation insurance is often misunderstood as a comprehensive accident cover. That's not the case.

This cover only removes depreciation from replaced parts during repairs. It does not include:

• Engine protection, unless separately purchased.
• Roadside assistance.
• Key loss or replacement.
• Return-to-invoice benefit.
• No Claim Bonus (NCB) protection.

Each of these is available as a separate add-on in car insurance, and each comes with its own conditions and costs.

To truly enhance your car insurance coverage, zero dep should be one of multiple well-chosen add-ons in car insurance—not the only one.

Misconception 7: Every Insurer Offers the Same Coverage

Though most insurers offer zero depreciation car insurance, the coverage and terms vary quite a bit.

Some allow only two claims per year, while others might permit three or more. Certain insurers cover labour charges under this add-on, whereas others may not. Age limits for vehicles can also differ, typically ranging from five to seven years.

Always read the policy wordings carefully before deciding. Don't rely solely on product brochures or assumptions.

Misconception 8: It Makes No Sense If You Rarely Make Claims

Some people feel there's little sense in paying for zero depreciation if they hardly ever make a claim. At first glance, it does seem like an extra cost you might never need.

It's like a raincoat — you don't use it every day, but when it rains, you're glad you have it. Zero Dep is there to soften the financial impact when things go wrong.

A single accident can burn a big hole in your pocket—sometimes costing more than what you've paid in premiums over several years. So even if you've never claimed before, this one add-on could make a huge difference when it matters most.

Misconception 9: It Changes Your Car's IDV

This is not accurate.

The Insured Declared Value (IDV) is based on the vehicle's age and ex-showroom price, not on whether you have zero dep car insurance or not. It determines your compensation in case of total loss or theft.

Zero dep plays no role in calculating IDV. Its benefits apply only during repairs—not in situations where the car is declared a total loss.

Why is Zero Depreciation Car Insurance Worth Considering?

Among various add-ons in car insurance, the zero depreciation cover is both practical and valuable. It offers a smoother claim experience and helps reduce financial shocks after an accident. While the premium is slightly higher, the cost is often minor compared to the potential savings during major repairs. You can refer to this table:

Disclaimer: Please refer to the insurer's policy wordings for detailed terms & conditions before making a purchase.

All In All

Purchasing a car is a significant investment, but what's essential is to protect your car with the right car insurance policy coverage. To start with, get a comprehensive car insurance policy, but it is always a wise decision to get smart add-ons like zero depreciation—which can make a real difference. They bridge the gap between what's covered and what you actually pay. Understand what you're buying, and your car—and wallet—will thank you later.