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Zero Depreciation Add-on Cover Myths Busted

Written by Saad Ahmad
Updated On Oct 17, 20232 min read

It is a prudent option to acquire Zero Depreciation coverage. However, it is critical to comprehend exactly what it offers. Read this article to discover more.

Cars, like any other piece of machinery, lose value over time as a result of wear and tear; this loss of value is called depreciation, and the rate at which it occurs is called depreciation rate. With current rates, your car's value will drop 20% in a year and then rise 10% over the next three years. This rate affects both the purchase price and the cost of insurance for a vehicle. Car insurance claim restrictions are determined using the Insured Declared Value, which is impacted by the insurance rate. With Zero Depreciation vehicle insurance, you may avoid having your IDV influenced by the depreciation rate. Read this page before purchasing this cover to learn about the common misconceptions about it.

 Zero Depreciation Add-on Cover Myths Busted

Myths about Add-on Covers with Zero Deprecation

The zero depreciation cover provides higher claim amounts by not taking into account the car's depreciation rate at the time the claim is filed. This insurance isn't cheap, but if something goes wrong, it will save you a lot of money. This coverage is available for automobiles under the age of five years. Go here for further information on an automobile's depreciation rate. When selecting whether or not to acquire a zero depreciation auto insurance coverage, keep the following factors in mind:

  • Consumables are Covered by Insurance

When repairing a car, the garage uses a range of consumable supplies such as nuts and bolts, oil, and other such items. The cost of such items is not covered by a car insurance policy unless you purchase a Consumables Add-on. Such costs are not covered by the Zero Depreciation Plan.

  • Deductibles The Cost Is Paid For

This plan does not cover Deductibles or Consumables. As a result, in the case of a claim, you'll have to vouch for the policy's Compulsory Deductible component. In the case of a claim, it is a predetermined nominal figure for which the policyholder is liable.

  • Per person, One Claim

You may be limited in the number of claims you may make under this plan throughout the policy period. The standard maximum is twice, however, this might vary. It does not, for example, have such a restriction at the moment, however that may change in the future. It is advisable to read the Policy Wordings at the time of purchase to ascertain the claim limit under the Zero Depreciation Cover.

  • Buying an Old Car with no Depreciation is Simple

If you have a 6-year-old car and want to insure it with a Zero Depreciation Add-on, you could have some difficulties. Most insurers do not supply this add-on for vehicles older than five years.

  • Two-Wheelers are Prohibited

The Zero Depreciation add-on is applicable to both cars and motorbikes. When acquiring or renewing your vehicle's insurance policy, you can select this add-on protection along with the Comprehensive Plan.

  • There are no exceptions to this Rule

The Zero Depreciation Add-on is subject to the same exclusions as other vehicle insurance add-ons. It normally does not cover the following features of an insured vehicle.

  • Technical breakdown of a vehicle causes damage.
  • It's impossible to avoid wear and tear.
  • An oil spill or a water incursion might cause significant damage.
  • Items that are not covered, such as a gas or bi-fuel kit, are ruined.

Take Away

In general, a zero depreciation policy will prevent the rate of depreciation from affecting the Insured Declared Value of your vehicle when you submit a claim. It is more expensive than other policies, but the benefits are assured to be disproportionately favorable in the case of a calamity. Before you buy this cover, make sure you know what it offers and what it doesn't. There is a 0% depreciation cover available as an add-on to your regular insurance; there are many more useful add-ons for your car insurance; discover more about add-ons by clicking here.

Also read - Find Out Why Third Party Insurance Policy Is Necessary

Disclaimer: 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.


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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Written by Saad Ahmad
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 Saad is a marketing guru and has some exciting knowledge to share about the motor and related industry. Saad in his last work with a major Indian yet global conglomerate has made direct contributions to the Insurance sector. In his free time, Saad likes to play badminton and listen to melancholic music

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