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Zero Depreciation Car Insurance

Zero depreciation is a car insurance add-on cover that makes the insurance companies settle the claim amount without taking the depreciation on various parts of the car into consideration, which enhances the claim amount of the policyholder. It can be availed for a limited number of times in a policy term of the insurance policy.

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Zero Depreciation Car Insurance Plans

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Key Features:
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Starting From 2396
Key Features:
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  • PSU Provider
  • Quick Claim Settlement
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What is Depreciation Mean?

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 in handy.

What is Nil/Zero Depreciation Car Insurance?

Zero Dep Car Insurance - 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.

Who Should Opt for a Zero Depreciation Cover Add-on?

Here is the list of types of people who should buy the zero depreciation cover:

1. New Car Owners – New car owners who have purchased a new car should opt for this cover as depreciation starts since the car is sold. Hence, if a new car gets damaged, one might not get a good amount of claim without this add-on cover.

2. People who have Luxury Cars that have Expensive Parts – If you own a luxury car and it gets hurt due to an accident, it clears that you will have to spend a huge amount on its repair. Hence, a complete amount of claim can only help you to get your car repaired easily.

3. People Living in Accident-Prone Areas – People who reside in accident-prone areas are more likely to get indulged in accidents. Therefore, in order to receive a relevant amount of claim to get their cars repaired they should pick the zero-depreciation cover.

4. New Drivers - People who have just begun to drive a car or a new driver could take a little more time to become an expert and are more likely to get involved in a collision. Hence, this add-on cover is a must for such people.

5. Regular Car Users – Since accidents can bring any amount of damage, hence, it may not be easy for even old car owners to bear the cost of repair. Hence, if your car is eligible to be covered with the zero depreciation plan, you should opt for it.

Benefits of Zero Depreciation Car Insurance Cover

The benefits of zero depreciation car insurance cover are mentioned below:

1. Enhances Coverage: A zero depreciation add-on cover is not just beneficial for amateur drivers but also for experienced drivers. It offers additional protection to the policyholder from financial crises arising due to damages or losses to the car in an accident or mishap. Also, this cover reduces the expenses of policyholders to almost zero.

2. Repair Cost Considered Without Depreciated Value: Cost arising out of replacement or repair of car’s insured parts are resolved without taking into account the depreciated value.

3. Curbs Additional Expenses: Expenses arising out-of-pocket are limited as the cost of depreciation is not considered while going for claim settlement.

4. Save Money in the Long Run: With a zero depreciation cover, the premium amount becomes higher. However, in case of a mishap, the claim amount will not take into account the depreciation of the car hence giving you a higher compensation. This compensation amount is usually much higher than the premium paid for the add-on and

5. Greater Compensation: The limit of the claim you can receive is determined by the policy’s IDV. This is directly affected by the depreciation rate. Hence, with the zero depreciation add-on cover, you can make claims that do not take into account the depreciation rate of the car and receive a higher claim amount.

6. Greater Peace of Mind: Car insurance provides a layer of protection for the car owner and the car by compensating for losses and peace of mind. This is further strengthened by a zero-depreciation add-on cover as it negated the depreciation rate of the car.

Zero Depreciation Car Insurance Vs Comprehensive Coverage

The difference between zero depreciation cover and comprehensive cover can be understood with the help of the table below:


Comprehensive Car Insurance Cover

Zero Depreciation Car Insurance Cover


Low premium amount

High premium amount

Claim Settlement Amount

Low claim settlement amount due to depreciation estimated for all parts of the car.

High claim settlement amount since estimation of depreciation is not done.

Car Parts Repair

50% depreciation is considered on all repairing parts.

Zero depreciation add-on insurance provides cover for all the repairing costs.

Car Age

The depreciation of the car increases with the passing age of the car.

Due to the add-on of zero depreciation, the depreciation will be considered as nil.

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Depreciation Rates in Car Insurance

Following is the impact of zero depreciation/nil depreciation/bumper to bumper insurance.

Age of Car

Depreciation Rate Without Zero Depreciation Cover

Depreciation Rate With Zero Depreciation Cover

Under 6 months



6 months to 1 year



1-2 years



2-3 years



3-4 years



4-5 years



5-10 years



Above 10 years



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



Fibre glass parts



Glass parts



How is Zero Depreciation Car Insurance Premium Determined?

1. Car’s Age and Model:

The age and model of your car significantly impact the premium. Newer and high-end models usually have higher premiums due to the higher cost of their parts and repairs.

2. Insurance Provider:

Different insurance providers have different methods of calculating premiums. It’s advisable to compare quotes from various insurers to get a good deal.

3. Location:

Your geographical location plays a part too. Areas prone to accidents or thefts might have higher premiums.

4. Claim History:

Your claim history can also influence the premium. A clean claim history may lead to a lower premium.

5. Add-On Covers:

If you opt for additional covers along with the zero depreciation cover, the premium will increase accordingly.

6. Frequency of Policy Purchase:

Some insurers increase the premium if you opt for zero depreciation cover consecutively in policy renewals.

7. IDV (Insured Declared Value):

The IDV of your car is the maximum amount you can claim under the policy. Higher IDV can lead to a higher premium.

8. Policy Terms and Conditions:

The terms and conditions of the policy, including the coverage, exclusions, and add-ons, also play a part in determining the premium.

9. Engine Capacity and Type:

  • Cars with higher engine capacity may have higher premiums as the repair costs for such vehicles are usually higher.
  • Understanding these factors will help you get a clearer picture of how your Zero Depreciation Car Insurance premium is calculated.

How to Buy Zero Depreciation Car Insurance?

Purchasing a Zero Depreciation Car Insurance is a wise decision as it ensures a higher claim amount in case of damages. Here's a systematic guide on how to buy this insurance:

1. Understand Zero Depreciation Cover:

- Before you buy, understand what Zero Depreciation Car Insurance entails. It provides comprehensive coverage without accounting for depreciation, ensuring you get a higher claim amount.

2. Online Research:

- Look for insurance providers that offer Zero Depreciation cover online. Compare the features, benefits, and premiums of different policies using comparison tools.

3. Choose a Reliable Insurer:

- Opt for an insurer with a good claim settlement ratio, positive customer reviews, and a solid online presence for ease of policy management.

4. Get Quotes:

- Obtain quotes from multiple insurers. Fill in the required details accurately to get a precise quote.

5. Review Coverage and Exclusions:

- Examine the coverage, exclusions, and the terms and conditions of the policy. It's essential to know what is covered and what is not.

6. Consider Additional Covers:

- Assess if you need additional covers like engine protection, roadside assistance, etc. These add-ons will increase the premium but provide extra protection.

7. Fill in the Details:

- Provide all necessary details such as personal information, car details, and previous insurance information accurately.

8. Payment:

- Once satisfied with the chosen policy, proceed to make the payment through a secure online payment gateway.

9. Review Policy Document:

- After the payment, you will receive the policy document via email. Review it to ensure all details are correct.

10. Download and Print the Policy:

- Download a copy of the policy for your records. It's advisable to keep a digital copy on your phone and a printed copy in your vehicle.

11. Consult with an Advisor:

- If at any point you find the process confusing, consult with an insurance advisor. They can guide you through the process and help you make an informed decision.

The process of buying Zero Depth Car Insurance is quite straightforward, especially online. The key is to understand what you are buying, compare different policies, and choose an insurer that meets your needs and budget.

How to Renew Zero Depreciation Car Insurance?

Renewing your Zero Depreciation Car Insurance is crucial to ensure continuous coverage and peace of mind while on the road. Here’s a simplified guide to help you through the renewal process:

1. Review Current Policy:

- Before renewal, review your current policy to understand the coverage, benefits, and any exclusions. Assess if the policy still meets your needs or if you require additional coverage.

2. Check Renewal Reminder:

- Usually, insurance companies send out renewal reminders via email or SMS. Keep an eye out for these reminders which may also contain instructions for renewal.

3. Online Renewal:

- Visit the insurer’s website or use their mobile app for renewal. Log in with your credentials and navigate to the renewal section.

4. Update Information:

- Update any changed information such as address, contact number, or any other relevant details. It’s important to keep your information current to avoid any issues during a claim.

5. Compare Other Offers:

- It’s wise to compare other offers available in the market. Use online comparison tools to compare premiums and coverage offered by different insurers.

6. Consider Additional Coverage:

- If needed, opt for additional coverage or add-ons like roadside assistance, engine protection, etc., to enhance your policy.

7. Check Discounts:

- Look for discounts or offers that may be available during renewal. Some insurers offer discounts for a good driving record or for installing safety devices in your car.

8. Make Payment:

- Once satisfied, proceed to make the payment for renewal through a secure online payment gateway.

9. Review New Policy Document:

- After payment, you will receive a new policy document via email. Review it to ensure all details are correct and the coverage is as per your requirements.

10. Download and Print:

- Download a copy of the new policy document for your records. Keep a digital copy on your phone and a printed copy in your car.

11. Consult an Advisor if Necessary:

- If you have any doubts or find the process confusing, consider consulting with an insurance advisor who can guide you through the renewal process.

The process of renewing Zero Depth Car Insurance is now more streamlined thanks to online platforms provided by insurance companies. Ensuring a timely renewal will help you maintain uninterrupted coverage and drive with peace of mind.

What is the Cost of A Zero Depreciation Cover? What Makes it Worth the Price?

In most cases, the zero depreciation cover costs approximately 15%of the insurance premium. Though it may seem like a steep price for an add-on cover, it is worth the cost as the compensation amount will prove to be significantly higher than the premium. A zero depreciation insurance calculator can help you estimate the cost of a zero dep cover.

Things to Keep in Mind About the Zero Depreciation Add-on Cover?

These are a few things to keep in mind when purchasing zero depreciation car insurance:

  • This add-on is available only for cars that are less than five years old.
  • The Zero-Depreciation Cover does not deduct the compulsory deductibles of the policy.
  • There is a limited number of Zero depreciation claims within a year.
  • Zero Depreciation cover and the bumper to bumper cover offer the same coverage.


Wrapping up, Zero Depreciation Car Insurance means you get more money if your car gets damaged. Yes, you might pay a bit more at the start, but if something happens to your car, it's totally worth it. Think of it as a safety net for your pocket. If you don't want any nasty surprises after a bump or scratch, this is the way to go!

Zero Depreciation Car Insurance

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FAQs about Zero Depreciation Car Insurance

  • What is a zero depreciation insurance?

    A zero depreciation insurance is also known as a nil depreciation insurance. It is a kind of insurance plan that provides total coverage without deducting the depreciation value of the car. It simply means that in case your insured vehicle gets damaged in the accident, the insurance provider would compensate you with the entire cost.

  • What is the best zero depreciation car insurance in India?

    Zero depreciation is an add-on cover under which the claim amount is paid by the insurance company without any deduction of depreciation. Most of the car insurance companies allow up to 2 claims under zero depreciation add-on. However, IFFCO Tokio General Insurance Company, Royal Sundaram General Insurance, and New India Assurance allow unlimited zero depreciation claims.

  • What is the significance of buying a zero depreciation add-on cover?

    A zero depreciation add-on cover helps the policyholder in reducing the premium payable towards car insurance plan significantly.The expenses related to depreciation of car components and voluntary deductibles is paid by the policyholder during the claim settlement. However, with a zero depreciation add-on cover, a policyholder is entitled to receive the full sum assured amount. This means that depreciation on car components will not get deducted (except the tyres and tubes). It is highly recommended for all the new car owners to buy a zero depreciation add-on cover.

  • What is IDV or Insured Declared Value in zero depreciation add-on cover?

    Insured declared value is basically the sum assured value that the insured individual would receive in case of complete loss or theft of the insured vehicle. It simply refers to the present market value of the insured car after subtracting the registration cost and depreciation value of the car components.

  • Can I buy a zero dep car insurance after 5 years?

    This depends from insurance provider to insurance provider. Generally, insurance companies allow zero depreciation cover for new cars that are not more than 5 years old. However, in case your car is more than 5 years old, you should talk to your insurance provider for the next suitable course of action. Moreover, there are certain insurance companies that offer zero depreciation cover for cars that are more than 5 years old but only through offline sources.

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#Applicable on non-inspection cases i.e. existing policy has not expired or when buying a policy for a new vehicle.