Zero Depreciation in Car Insurance: Is It a Good Deal?

Get Car Insurance starting at only ₹2,094/year #
Car Insurance

So you bought a new car. Congratulations! You have probably put a lot of time and effort into buying your new car. However, buying a car insurance policy is also a significant step toward financially protecting your precious possessions. But does your car insurance cover the entire cost of the repairs for the damages to the car parts? Let's find out.

Read more

  • Renew policy in 2 minutes*

  • 20+ Insurers to choose

  • 1.2Cr+ Vehicles Insured

Car Insurance

#TP price for less than 1000 CC cars. All savings are provided by insurers as per IRDAI approved insurance plan. Standard T&C apply.

Get Car Insurance starting at only ₹2,094/year #
Looking for Car Insurance?
    Other models
    Other variants
    Select your variant
    View all variants
      Full Name
      Mobile No.
      We don’t spam
      View Prices
      Please wait..
      By clicking on “View Prices”, you agree to our Privacy Policy & Terms of Use
      Get Updates on WhatsApp
      Select Make
      Select Model
      Fuel Type
      Select variant
      Registration year
      Registration month
      Save & update
      Please wait..
      Search with another car number?

      We have found best plans for you!! Our advisor will get in touch with you soon.

      Understanding Depreciation in Car Insurance

      Depreciation refers to the loss of value of a vehicle over time due to age, wear and tear and obsolesces. If you purchase a new car for Rs 10 lakh, its value will decrease with every passing year.

      In case of an accident, the insurer will calculate the claim based on the depreciated value of the car parts. They will also have certain deductions and exemptions; in fine print that apply to the policy. Unfortunately, the insurer analysis the damage sustained by the insured car, and the value is excluded from the final claim amount that you will receive. To overcome this problem, the zero-dep on four-wheeler insurance comes to help you.

      What is Zero Depreciation Cover?

      A zero dep cover is an add-on cover (rider) that covers the depreciation applicable to the value of the insured vehicle. With it, the insurer does not subtract the depreciation value on different car parts while covering any claim amount. This cover is commonly known as the Bumper to Bumper cover and the Nil Depreciation cover.

      To get wide coverage, you should buy a zero-dep car insurance policy. Even you can opt for this cover during the car insurance renewal.

      Calculation of the Rate of Depreciation

      The Insurance Regulatory and Development Authority of India (IRDAI) has laid down some depreciation rates for insurance claim purposes. This applies to all car insurance companies across the country. The depreciation rates are as follows-

      Car Parts Rate of Depreciation
      Plastic parts, nylon parts, rubber parts, tyres & tubes 50%
      Paintwork 50%
      Glass and fibreglass components 30%
      Metallic parts 0-5%

      How is Zero Dep Cover Different from Comprehensive Car Insurance?

      In the case of a comprehensive insurance policy, the policyholder is reimbursed by the amount after a complex calculation taking into account the car depreciated value.

      On the other hand, with the Zero-Dep in car insurance, the policyholder will be reimbursed with the full amount of the repair cost regardless of the age and the car's current value.

      To give you a better insight, the below table highlights the difference between a comprehensive policy with zero dep cover and without it-

      Features Comprehensive Car Insurance With Zero-dep Add-on Cover Comprehensive Car Insurance Without Zero-dep Add-on Cover
      Claim Amount Get compensated without deducting the depreciation Depreciation will be applicable on the certain car parts
      Premium Slightly higher Comparatively lower
      Age of the car Up to 5 years Up to 15 years
      Own Expenses Less burden on the policyholder while settling claims The policyholder has to pay some of the expenses
      Coverage for Various Car Parts Maximum coverage Comparatively less

      Ideal Time to Purchase a Zero Depreciation Cover

      A zero-depreciation cover can help you save a lot of money for repairs and when replacing expensive car parts. This add-on cover is beneficial for the following cases-

      • Luxury cars and high-maintenance car owners must get this cover as the depreciation value of these parts would be even higher.
      • Those who reside in an accident-prone area where the car owner might bear high service costs should opt for this cover.
      • Those who worry about small dents & bumps and wish to keep their car in pristine condition should buy this cover.
      • New drivers, aged drivers, and young drivers who are unsure of their driving skills may end up needing repairs more than usual. Therefore, they must choose this car insurance add-on cover.
      • This type is ideal for a brand-new car as it will fully cover all damages to the car.

      You May Also Read: All About Zero Dep Insurance

      Final Thoughts

      Before buying zero dep add-on cover for your car, it is advised to take time and compare multiple plans offered by different insurers to make a knowledgeable decision. You can also visit the official website of Policybazaar Insurance Brokers Limited if you want a precise comparison. Looking at the advantages associated with this add-on cover, it will turn out to be a great investment for you!

      Find similar car insurance quotes by body type

      Hatchback Sedan SUV MUV
      Save upto 85% on Car Insurance
      Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
       Why buy from policybazaar

      Car insurance articles

      Recent Articles
      Popular Articles
      IDV in Car Insurance

      22 Feb 2024

      In layman's terms, the IDV full form is the Insured Declared Value
      Read more
      Must-Have Car Insurance Addons for Brand New Cars

      31 Jan 2024

      Investing in a full-coverage car insurance policy is essential for
      Read more
      No Claim Bonus (NCB) in Car Insurance

      29 Jan 2024

      No Claim Bonus (NCB) is a reward given by an insurer to a
      Read more
      How to Choose the Right Car Insurance for Your First Car?

      17 Jan 2024

      Buying their first car is no less than a milestone unlocked for
      Read more
      Things To Know Before Purchasing Sedan Car Insurance

      12 Dec 2023

      The type of four-wheeler you purchase also impacts its insurance
      Read more
      Check Vehicle or Car Insurance Status/Validity Online
      It doesn’t matter if you are an excellent driver or take your car out only once in a few months; your car must be
      Read more
      Getting Your Duplicate Car Insurance Policy is Easy-Here’s How!
      Losing your car insurance documents can be daunting. In such a state of affairs, the first thing that comes to your
      Read more
      Find Car Insurance Details By Registration Number
      Sometimes, you may face situations when you need car insurance or vehicle owner details but cannot readily access
      Read more
      How to Transfer Car Insurance Policy?
      An integral part of selling a car for both the buyer and the seller is ensuring a successful car insurance transfer
      Read more
      Comprehensive Insurance Vs Third Party Insurance
      Comprehensive car insurance offers protection to the insured car against third-party liabilities and own damages due
      Read more

      #Rs 2094/- per annum is the price for third-party motor insurance for private cars (non-commercial) of not more than 1000cc

      *Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.

      View Plans
      Download the Policybazaar app
      to manage all your insurance needs.