Zero Depreciation Add-on

Zero Depreciation Add-on In Car Insurance

Like every other commodity, your car is also subject to depreciation, i.e., the devaluation with time due to wear and tear. The onus of bearing the depreciation liability originally rests with the car owner and not the insurance provider. Thus, at the time of a claim settlement, the amount of depreciation applicable on your car and its parts get deducted from the compensation amount thereby reducing it. This is where the Zero Depreciation add-on cover comes handy.

A zero depreciation add-on cover, also known as Nil Depreciation and Bumper-to-Bumper cover, is a popular car insurance add-on cover which is most commonly opted by car owners along with their comprehensive car insurance policy. It shifts the liability of bearing the depreciation of your car and its parts from you to the insurance company against a nominal premium. Sometimes, even a single claim helps you recover the entire zero depreciation cover’s premium amount.

A zero depreciation add-on covers all parts of your car at 100% except tyres, tubes and batteries which are covered at 50%. Generally, insurers allow 2 zero depreciation claims during the policy tenure, however, there are some insurers like IFFCO Tokio who allow you to make an unlimited number of zero depreciation claims during the tenure of your car insurance policy.

A zero depreciation cover should be ideally opted by the following:

  1. New car owners
  2. People who have luxury cars which has expensive parts
  3. People living in accident-prone areas
  4. New drivers
  5. Regular car users

Zero Depreciation Cover vs Normal Insurance

Age of Car

Depreciation Rate Without Zero Depreciation Cover

Depreciation Rate With Zero Depreciation Cover

Under 6 months

Nil

0%

6 months to 1 year

5%

0%

1-2 years

10%

0%

2-3 years

15%

0%

3-4 years

25%

0%

4-5 years

35%

0%

5-10 years

40%

0%

Above 10 years

50%

0%

Part of Car

Depreciation Rate Without Zero Depreciation Cover

Depreciation Rate With Zero Depreciation Cover

Paint work / Rubber / nylon / plastic parts, tires and tubes, batteries and airbags parts

50%

0%

Fibre glass parts

30%

0%

Glass parts

Nil

0%

Car Companies User Reviews

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