Difference Between Zero Dep and Comprehensive Car Insurance Policy

If you are new to the motor insurance world, you must have struggled to distinguish between comprehensive car insurance and zero dep insurance. Many times people also use these terms interchangeably, however, both of them are totally different. Let us decode the difference between zero dep and comprehensive policy.

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What is a Comprehensive Car Insurance?

As the name suggests, a comprehensive car insurance policy offers broader coverage to the policyholder. Under this car insurance policy, the insurance company compensates the policyholder against third-party liabilities and own damages arising out of the insured car. Own damages include damages sustained by the insured car due to unforeseen events like accidents, collisions, earthquakes, strikes, fire, theft, etc. 

On the other hand, third-party liabilities include third-party death, injury and property damage due to the insured vehicle.

What is Zero Depreciation in Car Insurance?

A zero depreciation cover is basically an additional cover that you can add to your comprehensive car insurance policy. 

Also known as Nil depreciation or Bumper to Bumper insurance, this add-on provides coverage for the depreciation sustained by the insured four-wheeler. Generally, a standard comprehensive car policy does not cover any depreciation borne by the insured car.

However, with the help of this add-on, you can get compensated for any depreciation as per the rates set by the IRDAI. It covers all parts of a vehicle including plastic parts, rubber, nylon parts, batteries, tyres, tubes, airbags and fibreglass components. 

Zero dep car insurance is very beneficial for new cars. It can be purchased along with a comprehensive car insurance plan by paying some extra premium. 

Comprehensive Insurance vs Zero Depreciation for Car

Now that you know the meaning of both these terms, let us understand the differences between them:

Point of Difference Comprehensive car insurance with zero dep cover Comprehensive car insurance without zero dep cover
Premium Higher than a standard comprehensive policy Lesser as it does not include zero dep
Coverage Covers depreciation borne by the insured car along with own damages and third-party liabilities.  Only covers own damages and third-party liabilities arising out of the insured four-wheeler. 
Compensation Received Compensation received is higher as it also compensates for depreciation borne. Lesser compensation as depreciation is not included.
Age of Car Depends on the insurer but is usually given for cars upto 5 years old. No age limit of the car
Repair of Plastic Parts No depreciation is considered when repairing plastic parts of a car 50% depreciation cost is considered when repairing plastic parts

As soon as a car comes out of the showroom, its value starts to depreciate. Thus, to cover this depreciation, a car owner can purchase zero dep cover along with his/her comprehensive car insurance policy. Thus, it is an additional cover and only covers the depreciation of a car.

Wrapping Up!

If you have a new car, taking the zero dep add-on along with your comprehensive car insurance policy can be really beneficial for you. Moreover, by paying a small premium, you can get your car covered against any depreciation at the time of claim settlement. Note that you cannot purchase a zero-dep add-on separately. It can only be purchased along with a comprehensive car policy.

Written By: PolicyBazaar - Updated: 18 November 2022

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