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Difference Between Zero Dep Car Insurance and Comprehensive Car Insurance Policy

Published On Aug 17, 2023

Difference Between Zero Dep Car Insurance and Comprehensive Car Insurance Policy

Car insurance is crucial for protecting your four-wheeler from risks and damages. While a basic policy provides mandatory third-party coverage, it may not fully protect your own vehicle. Comprehensive insurance covers both liability and damages, but for more extensive coverage, zero depreciation insurance is an add-on option. Zero depreciation coverage offers complete reimbursement for damages without considering depreciation. This blog discusses the difference between these two insurance types and learn about the benefits of having a zero depreciation plan along with a comprehensive insurance plan.

Difference Between Zero Dep Car Insurance and Comprehensive Car Insurance Policy

What is comprehensive car insurance?

Comprehensive car insurance, also known as comprehensive coverage, is a type of insurance policy that provides extensive protection for your vehicle. It is often considered a "premium insurance" policy because it covers too many things compared to other types of car insurance. Comprehensive insurance covers various damages and risks associated with your vehicle.

Here are some of the key features and coverage provided by comprehensive car insurance:

  1. It covers the cost of repairs or replacement if your car is damaged in an accident, regardless of who is at fault. This includes collision damage with other vehicles or objects.
  2. If you or your passengers are injured in an accident, comprehensive insurance can provide coverage for rehabilitation costs, medical expenses, and other related expenses.
  3. If your car gets stolen, comprehensive insurance compensates you for the loss. This coverage typically includes both the value of the vehicle and any additional accessories or modifications.
  4. Comprehensive insurance protects your vehicle from any damages caused by fire, including both accidental fires and arson.
  5. It covers damages resulting from natural disasters such as earthquakes, floods, hurricanes, storms, or other weather-related events.
  6. This insurance covers any damage caused to another person's vehicle or property in an accident where you are at fault.
  7. If someone gets injured in an accident caused by your vehicle, comprehensive insurance can cover the medical expenses, legal costs, and other liabilities associated with the injury.

What is zero depreciation car insurance?

Zero depreciation is important to review the specific terms and conditions of the insurance policy to understand the extent of coverage and any exclusions or limitations that may apply. It comes at a slightly higher premium than the basic policy but provides enhanced coverage.

  1. When settling a claim for damages to a car, the insurance provider usually considers the age of the car and the depreciation (wear and tear) of its parts. The final claim amount includes a standard deduction for depreciation.
  2. reWith a zero-depreciation add-on, the insurer does not consider the depreciation of the car during claim settlement. The policyholder is entitled to receive the full claim amount as per the extent of the damage, without any deduction for depreciation.
  3. Zero depreciation policy includes coverage for this depreciation, ensuring that the policyholder does not have to bear the cost out of pocket.
  4. In the event of a claim, the insurance company with a zero-depreciation policy does not deduct any depreciation from the repaired or replaced parts. It covers the entire repair cost incurred by the policyholder.
  5. Many insurance providers offer zero depreciation as an add-on that can be easily purchased along with the comprehensive policy through online platforms.

Difference between comprehensive & zero depreciation car insurance

Points of Difference

Comprehensive Insurance

Zero Depreciation Insurance

Type of Insurance

A standalone insurance plan

An additional cover that can be added to the comprehensive insurance plan

Deduction on Claim Amount

Depreciation is deducted from the claim amount

Depreciation is not deducted from the claim amount


Lower amount

Little higher amount

Claim Settlement Amount

Settlement amount is lower due to depreciation

Settlement amount is higher as depreciation is not deducted

Repairing of Car Parts

50% depreciation considered on repairing parts

Zero depreciation add-ons cover the entire repairing cost

Age of the Car

Depreciation increases as the car ages

Depreciation is considered nil with zero depreciation cover add-on

Applicable Depreciation Rates

Estimated depreciation for all car body parts

No depreciation is estimated


Available for cars of all ages

Available for cars aged up to 5 years

Number of Claims

Unlimited claims as long as IDV is not used up

There might be a limitation on the number of claims for zero depreciation

Scope of Cover

Coverage for third-party liability and own damage

Coverage for third-party liability, own damage, and depreciation on car parts

Premium Amount

Lower compared to zero depreciation policy

Higher due to wider coverage

Claim Pay-out

Lower due to deduction of depreciation

Higher as no deduction is made for depreciation

Additional Benefits

No financial loss due to depreciation

Minimum or no financial loss on the policyholder's end

Why should you consider a comprehensive insurance plan with zero depreciation insurance plan for your car?

Here's why you should consider a comprehensive insurance plan along with a zero-depreciation plan:

  1. Complete protection: A comprehensive insurance plan provides coverage for various risks and damages that can occur to your vehicle. It ensures that you are financially protected in case of accidents, theft, or damage caused by natural disasters. By adding a zero-depreciation plan, you eliminate the depreciation factor, ensuring that the coverage for wear and tear of body parts remains intact.
  2. Higher claim settlement: Without zero depreciation, the insurance company would deduct the depreciation value of the damaged parts before settling the claim. But with zero depreciation, the insurance company will offer you 100% of the entire cost (minus the deductibles) for repairing or replacing the damaged body parts. This reduces your out-of-pocket expenses and ensures you receive a higher claim settlement.
  3. Cost savings: The cost of repairing or replacing damaged body parts of your vehicle can be significant, especially for expensive cars. A zero-depreciation plan helps you save money by reducing your out-of-pocket expenses. Instead of paying a substantial amount for repairs due to depreciation, the insurance company covers the full cost of repairing or replacing the damaged parts, except for deductibles. This can be financially beneficial in the long run.


When considering a zero-depreciation plan, it's important to compare premiums across different insurance companies. Premiums can vary, so it's advisable to choose a policy that offers the lowest premium without compromising on the Insured Declared Value (IDV) or the coverage of the policy. Many online tools can be handy for you to compare quotes from leading insurers and select the best zero depreciation policy for your car.


  1. How does zero depreciation car insurance protect my vehicle better than comprehensive car insurance? 

Zero depreciation car insurance ensures that you receive the full cost of repairs or replacement parts in case of damage, while comprehensive car insurance may only provide coverage based on the depreciated value of your vehicle.

  1. Is zero depreciation car insurance more expensive than comprehensive car insurance? 

Zero depreciation car insurance generally comes with a higher premium compared to comprehensive car insurance. However, the additional cost may be worth it if you want to avoid paying for depreciation-related expenses during claims.

  1. Does zero depreciation car insurance cover damages due to regular wear and tear? 

Zero depreciation car insurance does not cover damages caused by regular wear and tear or mechanical breakdowns. It is designed to provide coverage for damages resulting from accidents and collisions.

  1. Do comprehensive car insurance cover damages caused by natural disasters? 

Yes, comprehensive car insurance typically covers damages caused by natural disasters such as floods, earthquakes, storms, or fire. It provides coverage for both repairs and replacement if the vehicle is declared a total loss.

  1. Which type of car insurance is recommended for a brand-new vehicle? 

For a brand-new vehicle, zero depreciation car insurance is often recommended. Since the vehicle has a higher value, zero depreciation coverage ensures that you receive the full cost of repairs or replacement parts without any deduction for depreciation. This helps maintain the vehicle's original value and reduces out-of-pocket expenses in case of damage.

  1. Is zero depreciation car insurance available for old cars? 

Zero depreciation car insurance is typically available for cars up to a certain age, which may vary between insurance providers. Generally, it is more commonly offered for cars up to five years old. For older cars, it may be more difficult to find zero depreciation coverage, and comprehensive insurance might be the only option.


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
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