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Zero Depreciation Cover Benefits


Written by Amit Jain

Updated Oct 18, 2023

Zero Depreciation Cover Benefits

A car insurance policy with zero depreciation, sometimes referred to as Nil depreciation or bumper-to-bumper coverage is a type of coverage for car insurance that excludes the depreciation element from the coverage, providing you with full coverage.

Simply put, depreciation is the fall in your car's worth. Its normal degradation over time is what has caused this fall. The depreciation is higher for older cars. When resolving claims, insurers subtract the depreciation value, which lowers the claim amount.

Zero Depreciation Cover Benefits

Why Choose The Zero Depreciation Car Policy?

Your car's value decreases over time as a result of normal wear and tear. The worth of the car decreases with time. Claim settlement is also impacted by this. Let's assume you file a claim after an unfortunate event involving your car. In this case, it's possible that you won't be able to get your money back for all of the replaced parts. This is so that the repair costs are covered by the insurance once the parts' depreciation has been taken into account. This means that you will not have to pay for the balance of the repair costs out of your individual pocket. The full replacement cost of the lost body part will be covered by the insurance provider. This type of coverage seems to be most beneficial for the following categories of people:

  • Those  with new cars
  • Those with luxury cars
  • New or inexperienced drivers
  • Those living in accident-prone areas or 
  • Anyone having a car with expensive spare parts. 

It will also be a good decision to take if you are always anxious about the risk of getting bumps and dents. 

Benefits of Zero Depreciation Car Insurance Policy

Following benefits become available to you when you get a car insurance policy with a zero depreciation add-on - 

  • In the event of an accident, a zero depreciation insurance safeguards you from having to spend a significant sum of money for the repair or replacement of your car's parts.
  • You receive the maximum payout of your claim amount with a zero depreciation cover. You simply have to accept the price of the required deduction.
  • Over and above the protection offered by your current auto insurance policy, a zero depreciation offers coverage for your car.
  • When you submit a car insurance claim, a nil depreciation cover helps you save more money.
  • Long-Term Cost Savings: A zero depreciation cover results in a higher premium. However, in the event of an accident, the claim amount will not account for the car's depreciation, providing you a bigger payout. This reimbursement amount is typically far greater than the add-on charge paid and

Zero Depreciation Car Insurance Vs Comprehensive Car Insurance Policy

Let’s discuss the differences between a standard comprehensive car insurance policy and a zero depreciation car insurance policy -

Basis of Comparison

Car Insurance with Zero Depreciation Cover

Car Insurance without Zero Depreciation Cover

Settlement of Claim

Settlement coverage is offered without any consideration of depreciation value

Claim amount depends on the present value of the vehicle that is a factor in depreciation.

Premium to be Paid

Relatively High

Relatively Low

Repairing Cost and Plastic Fiber

The Maximum Amount borne by Insurance company

PolicyHolder will have to pay relatively more from the pocket

Age of Car

Mostly Covers New Car up to 5 years

Could be taken for a car below 15 years

All fibre, rubber, and metal parts are completely covered by zero depreciation car insurance policies, with no deductions for wear and tear. It does not cover damage to the engine from water or oil leaks. This coverage does not cover any consumables, oil changes, or mechanical breakdowns.


After purchasing the zero depreciation cover, you should confirm how often you can file a claim with your car insurance provider. If you get the zero depreciation cover in addition to your standard car insurance policy, most providers would not let you file more than 2 claims during the course of your policy year. Thus, it is always wise to check beforehand.


You might want to reconsider the options for your car insurance policy again. If you are someone seeking maximum protection and  In the long run, choosing an insurance policy that includes the Zero Depreciation Cover might be the right choice for you.

Also Read: 

Learn Everything You Can About Public EV Charging In India.

What You Should Know About CNG Kit Installation


Written by Amit Jain

Amit is an upcoming name in the motor industry be it new cars/ bikes or used ones. Amit in his last stint worked as a consultant for major Fortune 500 companies across the globe.&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.

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