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What Everybody Ought to Know about Zero Depreciation Car Insurance Cover?


Mr. Kamal Shah got furious as he had to spend Rs 30,000 from his pocket towards repairing of the car. The comprehensive car insurance, which he bought last year, only reimbursed Rs 70,000 after factoring in depreciation. Kamal could have saved Rs 30,000 if he had opted for a zero depreciation car insurance cover.

At the time of claim, insurer factors in depreciation value of the vehicle to calculate the amount payable. The difference between the market value of the new part and the depreciated part has to be paid by the insured.

So opt for a zero depreciation cover to protect yourself from paying high costs at the time of claim settlement.

What is Zero Depreciation Cover?

Zero depreciation cover, also called ‘zero dep’ policy, offers complete coverage without factoring in depreciation. It means, if your car gets damaged following a collision, you will receive the entire cost from the insurer.

Zero Depreciation Cover Vs Normal Car Cover

Let’s find out what differentiates zero depreciation cover from standard insurance policy-


Zero Depreciation Cover

Normal Car Insurance

Claim Settlement

Offers full settlement coverage and depreciation will not make a dent

Claim amount is based on the current value of the vehicle, which factors in depreciation




Cost of repairing and plastic fiber

Insurer bears the cost

Insured has to shell out money

Age of the car

Usually covers only new cars

It can be taken for a car which is more than 3 years old

Factors to Consider Before Opting for Zero Depreciation Cover

Before you opt for the zero depreciation, it is worthwhile to ponder over below factors-

  • Cost-A car insurance policy that comes loaded with zero depreciation cover costs more. Because it offers complete coverage without considering depreciation so it charges slightly higher premium than comprehensive policy.
  • Number of claims- Usually, insurers limit the number of car insurance claims one can make in a year. It is done to deter policyholders from filing a claim for every single dent. Check the number of claims your insurer provides and make sure to approach the insurer only when the amount is big.
  • Available for new cars- Zero depreciation rider is available only for new cars.  From a customer point of view, it is also not very cost-effective to shell-out high premiums on a car which is more than 5 years old.

Who Should Buy Zero Depreciation Cover?

If your car is brand new, it is recommended to opt for a zero deprecation cover to protect it from all threats and damages. Many opine that it should only be bought by new drivers who are more prone to accidents. However, even the most experienced drivers get involved in accidents due to the fault of other vehicle’s driver. Hence zero depreciation cover is a must buy for all car owners.