Owning a car is a thrilling journey, but keeping it protected without burning a hole in your pocket can sometimes be a balancing act. Meet Anjali, a new car owner from Bangalore, who discovered the power of Zero Depreciation Car Insurance — a policy add-on that changed the way she managed repair expenses after an accident.
This guide explores Anjali’s experience, explains what zero depreciation cover means, its benefits and drawbacks, and everything else you need to know before deciding if it’s right for you.
Anjali’s Story: The Unexpected Bumper Repair and the Zero Depreciation Savior
Anjali had just bought a sparkling new sedan when one unfortunate day, a minor accident left her car’s bumper scratched and damaged. Driving to the service center, she braced herself for a heavy bill. To her relief, because she had opted for zero depreciation cover with her comprehensive insurance, she paid much less than expected.
She learned that without this cover, the insurer would reduce the claim amount by applying depreciation on the car parts replaced — meaning a significant out-of-pocket expense. This experience convinced Anjali that zero depreciation was money well spent.
What Is Zero Depreciation Car Insurance?
When your car gets damaged and you file a claim, insurance companies typically deduct depreciation on parts before paying you back. Depreciation is the reduction in value of parts due to wear and tear, age, and usage — meaning you pay the older value, not the replacement cost.
Zero Depreciation Cover (also called Nil Depreciation) is an optional add-on to your comprehensive car insurance policy that ensures you get full claim settlement without deducting the depreciation value of damaged or replaced parts (except mandatory deductibles).
How Does It Work?
Suppose your car bumper repair costs ₹10,000 and the insurer’s depreciation on plastic parts is 50%. Without zero dep cover, you’d get paid ₹5,000 (after deductibles), but with zero dep, you receive the full ₹9,000+ amount (minus deductible).
This add-on covers depreciation on parts like:
- Plastic, rubber, and fiber parts
- Aluminium parts
- Glass
- Tyres and tubes
- Battery
Usually, zero dep cover applies to cars up to 5 years old, beyond which insurers may not offer this benefit.
Key Benefits of Zero Depreciation Car Insurance
| Benefit | Explanation |
|---|---|
| Higher Claim Amount | Full cost of parts covered without depreciation deduction |
| Saves Out-of-Pocket Expenses | Reduces unexpected repair costs |
| Protects New Cars | Especially useful for cars in the early years when depreciation is high |
| Peace of Mind | You don’t worry whether claim will cover full repair |
| Covers Most Replaceable Parts | Includes plastic, rubber, glass, tires, batteries, etc. |
Drawbacks and Considerations
| Drawback | Explanation |
|---|---|
| Higher Premium | Adds 15-30% extra on your base comprehensive premium |
| Limited Eligibility | Usually available only for cars less than 5 years old |
| Not Covering Routine Parts | Doesn’t cover consumables like brake pads, clutch, tyres wear due to usage |
| May Increase No Claim Bonus Reset Risk | Some insurers reset NCB on claims with zero dep cover |
| Additional Cost on Renewal | You pay extra premium every renewal for this add-on |
IRDAI Depreciation Chart: What Applies Without Zero Depreciation
| Part | Depreciation Rate (%) |
|---|---|
| Rubber, Plastic parts | 50 |
| Fiberglass parts | 50 |
| Clutch plate/fiber | 50 |
| Battery | 25 |
| Tyres and Tubes | 50 |
| Glass | 30 |
| Engine and Gearbox | No depreciation |
FAQs Anjali Had
Q1: Can I buy zero depreciation cover with any insurer?
A1: Most insurers offer it as an add-on to comprehensive policies but check eligibility and terms.
Q2: How much extra premium does zero dep add-on cost?
A2: Typically 15-30% of your basic comprehensive premium depending on car model and location.
Q3: Does zero depreciation cover all car parts?
A3: No, it excludes routine wear and tear parts like brake pads, clutch, and tires affected by use.
Q4: Is zero dep cover worth it for older cars?
A4: Usually not cost-effective for cars older than 5 years as depreciation cost reduces with age.
Q5: Can zero depreciation cover cause higher premiums on renewal?
A5: Yes, because it increases claim payout, your renewal premium may be slightly higher.
Table: Zero Depreciation Cover vs Standard Comprehensive Car Insurance
| Feature | Zero Depreciation Cover | Standard Comprehensive Cover |
|---|---|---|
| Depreciation Deduction | No depreciation deducted | Depreciation deducted on replaced parts |
| Claim Settlement Amount | Full invoice value of damaged parts | Reduced by depreciation rates |
| Premium Cost | Higher (15-30% more) | Lower premium |
| Eligibility | Usually cars < 5 years old | No age limit |
| Parts Covered | Plastic, rubber, battery, glass | Same but depreciation applies |
| Best For | New, luxury, or frequently used cars | Older cars or budget-conscious owners |
Anjali’s Tips: Is Zero Depreciation Cover Right For You?
- Opt for zero dep if your car is under 5 years old and you want maximum financial protection.
- Evaluate if the higher premium fits your budget versus potential savings in a claim.
- If you drive in crowded or accident-prone areas, it’s a good safeguard.
- For luxury or high-value vehicles, zero dep is often a must-have.
- Compare policies online across providers to get competitive rates.
External Links for More Information on Zero Depreciation Car Insurance
- ICICI Lombard Zero Depreciation Cover
- Groww Zero Depreciation Insurance Explained
- Economic Times on Zero Depreciation Cover
- Reliance General Zero Depreciation
- Acko Zero Depreciation Insurance Benefits
Final Words from Anjali
“Having zero depreciation car insurance meant I didn’t have to worry about paying thousands out of pocket after my accident. The slightly higher premium was worth the peace of mind knowing my car’s repairs would be fully covered.”
Disclaimer: This article is published for general informational purposes based on research, observations, and owner experiences. It should not be considered professional, technical, or legal advice. Vehicle specifications, costs, and procedures may vary by model, location, and time. Readers are advised to verify details with official sources or qualified professionals before making decisions.
