Purchasing a car insurance policy is essential for safeguarding your vehicle against financial losses caused by accidents, theft, or damage. However, many car owners are unaware that a standard policy includes depreciation deductions. This means that when you file a claim, the insurer does not cover the full cost of the damaged parts. That’s where zero dep car insurance becomes a valuable addition.
This article explains why zero dep car insurance is a must-have add-on and how it can benefit you.
What is Zero Depreciation Car Insurance?
Every vehicle loses value over time due to ageing and usage—a process known as depreciation. Under a standard car insurance policy, the insurer deducts the depreciated value of car parts before settling a claim. As a result, you receive a reduced amount and must cover the rest of the repair costs yourself.
A zero dep car insurance add-on eliminates depreciation deductions, ensuring that the insurer pays the full cost of repairing or replacing damaged car parts.
How Does Zero Depreciation Cover Work?
Let’s illustrate this with an example:
Suppose your vehicle is involved in an accident, and the repair cost is ₹60,000. With a standard car insurance policy, the insurer may deduct ₹15,000–₹20,000 due to depreciation, leaving you to pay the balance.
With a zero dep car insurance add-on, the insurer covers the entire ₹60,000 (excluding any deductibles), saving you from significant out-of-pocket expenses.
Depreciation Rates for Different Car Parts
According to industry standards, the following depreciation rates apply under a standard policy:
- Plastic and fibre parts: 30%
- Rubber and nylon parts: 50%
- Glass parts: No depreciation
- Metal parts: 5%–50% (depending on vehicle age)
- Paintwork: 50% depreciation on material cost
A zero dep car insurance cover waives all these depreciation charges, allowing for a higher claim settlement.
Why Should You Get a Zero Depreciation Cover?
1. Full Claim Settlement Without Depreciation
A standard policy deducts depreciation before settling claims, which lowers your reimbursement. A zero dep car insurance policy ensures you receive the full cost of part replacements and repairs.
2. Long-Term Cost Savings
Although the premium for a zero dep car insurance cover is slightly higher, it can save you from spending thousands on repairs—especially for expensive or imported parts.
3. Perfect for New and Luxury Cars
New cars depreciate quickly, and luxury models have high-cost components. A zero depreciation cover is ideal to protect your investment.
4. Essential for Inexperienced and High-Risk Drivers
If you’re a first-time car owner or regularly drive in congested or accident-prone areas, your risk of claims is higher. This add-on offers added financial security.
5. Best Suited for Vehicles Up to Five Years Old
Most insurers offer zero dep car insurance for vehicles that are less than five years old, which is when depreciation has the greatest impact.
6. Preserves Resale Value
By ensuring repairs are done with genuine parts, your car maintains better condition, resulting in a higher resale value.
7. Convenient, Cashless Repairs at Network Garages
With this cover, you can enjoy cashless repair services at authorised garages without worrying about depreciation deductions.
What’s Covered Under a Zero Depreciation Policy?
Typically, the zero dep car insurance add-on covers:
- Full cost of plastic, rubber, and fibre parts
- Full cost of metal parts (e.g., doors, bumpers, fenders)
- Paintwork and coatings, without depreciation
- Repairs and replacements at authorised garages
Note: Coverage details can vary between insurers. Always read your car insurance policy documents thoroughly.
What’s Not Covered?
Despite its benefits, zero dep car insurance does not cover:
- General wear and tear
- Mechanical failures due to poor maintenance
- Engine damage from water ingress or oil leaks
- Tyre damage (unless part of an accident)
- Policy exclusions and compulsory deductibles
How Much Does a Zero Depreciation Cover Cost?
The cost of a zero dep car insurance add-on depends on several factors:
- Vehicle age: Newer vehicles have lower depreciation, making the cover more affordable
- Car model and make: Premium and imported cars attract higher premiums
- Insurer: Prices may vary between providers
- Location: Cars driven in high-risk areas may have increased premiums
Is Zero Depreciation Cover Worth It?
Yes! Here’s why:
- Higher claim settlement – You get the full cost of repairs
- Reduced personal expenses – Avoid paying for depreciation
- Comprehensive protection – Especially for expensive car parts
- Peace of mind – Stress-free repairs and cashless services
- Smart financial choice – A small extra premium for substantial long-term savings
If you own a new or luxury vehicle, or drive frequently, adding this cover to your car insurance policy is a smart move.
How to Buy a Zero Depreciation Cover
Step 1: Choose a Reputable Insurer
Compare policies to find a provider offering comprehensive zero dep car insurance options.
Step 2: Check Eligibility
Most insurers provide this cover for vehicles up to five years old; some limit it to three.
Step 3: Understand the Terms
Review the inclusions and exclusions before buying.
Step 4: Compare Premium Costs
Check the price difference with and without the zero dep car insurance add-on.
Step 5: Buy Online for Better Rates
Online purchases often come with discounts, so consider buying your car insurance policy digitally.
Conclusion
A zero depreciation car insurance cover is a valuable add-on that prevents you from bearing the burden of high repair costs. While it increases your car insurance policy premium slightly, the benefits far outweigh the cost—especially for new or high-end cars.
When buying or renewing your car insurance policy, strongly consider including zero dep car insurance for comprehensive protection and peace of mind.