Compare & Buy Car, Bike and Health Insurance Online - InsuranceDekho
Track & Policy DownloadLogin

Things To Know About Zero Depreciation Cover In Car Insurance


Written by Udit Varshney

Updated Dec 20, 2023

Zero Depreciation Cover in Car Insurance in India

When a vehicle is involved in an accident or is stolen, the insurance company usually settles the claim based on the vehicle's current value, which includes depreciation. The Zero Depreciation coverage on car insurance, on the other hand, provides a complete settlement without taking into account depreciation. 

Things To Know About Zero Depreciation Cover In Car Insurance

What is Zero Depreciation Cover in Car Insurance?

Zero Depreciation cover in car insurance ensures that the insurer covers the full cost of repair or replacement without deducting the depreciation value of car parts. It is especially beneficial for new cars or expensive vehicles. However, it may result in a slightly higher premium. It is crucial to understand the terms and conditions of the policy before opting for this coverage.

Benefits of Zero Depreciation Cover in Car Insurance

Zero Depreciation cover is an add-on option in car insurance that provides significant benefits to policyholders. Here are some advantages of having a Zero Depreciation cover:


  • Full claim settlement: With Zero Depreciation cover, the insurer pays the entire cost of repair or replacement without factoring in the depreciation value of car parts. This ensures that policyholders receive maximum reimbursement for their claims.


  • Coverage for new cars: Zero Depreciation cover is particularly beneficial for new cars, as the depreciation rate is high during the initial years. It allows new car owners to protect their investment and maintain the vehicle's value.


  • Peace of mind: Knowing that the insurer will cover the full cost of repair or replacement gives policyholders peace of mind. They can be confident that they won't have to bear a significant financial burden in the event of an accident or damage to the car.


  • Reduced out-of-pocket expenses: Without Zero Depreciation cover, policyholders may have to pay a substantial portion of the repair costs due to depreciation deductions. With this coverage, their out-of-pocket expenses are significantly reduced or eliminated altogether.


  • Higher claim settlement: Zero Depreciation cover helps in obtaining a higher claim settlement amount as the depreciation value is not deducted. This ensures that policyholders are adequately compensated for the damages they have incurred.


  • Enhanced coverage: By opting for Zero Depreciation cover, policyholders can enjoy comprehensive coverage for their vehicle, making it an ideal choice for car enthusiasts or owners of luxury vehicles.


However, it is important to note that Zero Depreciation cover may result in a slightly higher premium. It is essential to carefully read and understand the terms and conditions of the policy before purchasing this add-on to ensure it meets your specific requirements.

What Are the Different Depreciation Rates?

Depreciation, as you may know, is the loss of value of an asset's real cost over time due to use. Depreciation values for various materials and parts are determined by the insurance policy. The standard rates are 30% for fibreglass and 50% for components with heavier wear and tear, such as plastic or rubber in tyres, tubing, batteries, and other parts. Depending on the vehicle's age, 0-50 percent for metallic components.

What Is The Amount Of Additional Premium That Must Be Paid?

The car insurance premium is calculated based on the vehicle's Insured Declared Value (IDV). In the event of loss or damage to the insured car, this is the maximum amount the insured may claim. The cost of general car insurance is determined by the vehicle's location, model, and age. The extra cost of zero depreciation automobile insurance is 20% of the cost of a standard policy. You will easily determine the amount of premium you can pay using a zero depreciation car insurance premium calculator found on car insurance online portals.

What Does Car Insurance's Zero Depreciation Coverage Exclude?

Zero-dep car insurance does not cover accessories that are installed after the fact and are not included in the standard product. An externally mounted music player, for example, or a gas kit are not covered by insurance. Batteries and tyres are also excluded by some car insurance companies.

What Makes It A Good Option?

The last thing you want to hear after your prized vehicle has been dented is that your car insurance doesn't cover the entire cost. High depreciation rates result in fewer car insurance claims, particularly for plastic parts that sustain major dents in accidents. When you choose a zero-depreciation car insurance policy, you can rest assured that you will receive the full amount of your claim without any deductions or depreciation.

Who Should Opt for Zero Depreciation Cover in Car Insurance?

Those who should opt for Zero Depreciation cover in car insurance include new car owners, individuals who own expensive vehicles, and those who want to minimize out-of-pocket expenses during claim settlements. It provides comprehensive coverage without factoring in depreciation, making it an ideal choice for those who value maximum reimbursement.

Also Read

Things To Know About Theft Cover In Car Insurance

How to Check Car Insurance Policy Status?



Written by Udit Varshney

Udit has built B2C segments across various industries and has had significant contributions to the insurance sector. Read More


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.

Explore more before buying Car Insurance

    must dotmust graphics

    Why to buy from InsuranceDekho?

    • Instant policy # within 5 mins
    • More than 45 Lac happy customers
    • Claim Support available all 7 days of the week

    People Also Read