Why You Must Opt For Zero Depreciation Car Insurance?

What are the benefits of buying a Zero Depreciation Car Insurance? What is the difference between a standard Comprehensive Car Insurance Policy and a Zero Depreciation Car Insurance Policy? Find out the answers in this post that explains everything in detail about the Zero Depreciation Insurance. 

Zerp Depreciation Insurance

In case, you hit another car and you have a car insurance to cover the damage expenses, there is a sense of safety. But what if you don’t get the claim money that was actually expected and on top of that, you have to bear some of its expenses from your own pocket? In such as scenario, you may feel what’s the use of taking a car insurance. This usually happens when you have the traditional comprehensive car insurance policy wherein claim settlements are done after calculating the depreciation value of the car.

This is exactly when the zero depreciation insurance comes to your rescue!

Read on to understand the benefits of buying a zero depreciation insurance policy, find differences between standard comprehensive car insurance and zero depreciation insurance and discover many other interesting details pertaining to zero dep car insurance.

Let’s understand what is a depreciation first

Depreciation is nothing but the reduction of the monetary value of an asset (car as per this article) over a course of time because of its constant usage, wear and obsolescence. The decreased value of the car is measured as depreciation. When the depreciation is calculated for a car, it takes age of the car into consideration which concludes that more the age of your car, the higher is its depreciation.

What is Zero Depreciation

Zero Depreciation Car Insurance

A Zero Depreciation Insurance as the name suggests is the zero amount of depreciation where there is no deduction for depreciation. Therefore, a Zero Depreciation Insurance is an additional car insurance cover which a buyer can opt for in the car insurance policy. Zero Depreciation Insurance will take care of your claim completely in any kind of damage without making you liable to pay depreciation amount.

There are 3 factors that impact the Zero Depreciation Premium:

  • The age of the car.
  • The location where the policy holder is based.
  • The model of the car.

Let’s understand Zero Depreciation Insurance settlement through an example:

Your claim amounts to Rs 30,000 and the total cost of car’s depreciation is Rs 7,000. Now, if you have not opted for Zero Depreciation Insurance coverage but you have a Comprehensive Insurance Policy, the insurer will accept the claim but will only pay Rs 23,000, plus you will be expected to bear the add on expenses for repairs. If you would have opted for a Zero Depreciation Insurance coverage, then you would have received the entire claim of Rs 30,000 without paying any additional expenses for damages. In fact, the insurance company would have borne all the other expenses. 

Pros of Zero Depreciation Insurance

  • It saves money as it sanctions the full amount of your claim. It prevents the unnecessary spending from one’s own pocket.
  • Unlike this popular belief that Zero Depreciation for auto insurance is effective just for amateur drivers, this type of insurance is vital for protecting even the experienced drivers and avoids fiscal burden of losses and damages incurred because of accidents.
  • It enhances the policy of the fundamental car insurance, reducing your costs to nearly zero.
  • It controls expenditures incurred because of depreciation cost of the insured car, according to the prevailing market value.
  • Expenses incurred due to fix or replacement of guaranteed parts are settled without even taking under account the depreciation value.

Zero Depreciation Insurance is meant to be availed in following cases:

  • Zero dep car insurance is majorly bought by new cars buyers. Zero dep cover will always be an add on option with comprehensive car insurance policy.
  • People with luxury cars should opt for 0 dep as they are already spending so much for its price, paying little more premium prevents the long-term losses during accidents.
  • People who are new to driving should definitely opt for zero dep insurance cover.
  • If you are living in accident-prone areas, then you must opt for zero depreciation insurance cover.
  • Cars equipped with expensive spare parts must be covered with zero depreciation insurance.

What’s the difference between Comprehensive Car Insurance Policy and Zero Depreciation Insurance?

Zero Depreciation Car Insurance vs Comprehensive Car Insurance

Comprehensive Car Insurance Zero Dep Insurance cover
Calculation of the claim is based on present value of the car which includes depreciation. Claim is calculated without considering the depreciation value. Offer settlement is done without any extra expense being charged.
The premium paid is less. Premium paid is little high.
Insurance policy holder must pay extra expense at the time of claim. Insurance company incurs the maximum amount at the time of claim.
Normal insurance coverage is done for a car which is less than 15 years old. Zero Dep coverage is done for a car which is up to 5 years old.


Factors that do not apply in case of availing Zero Depreciation Insurance coverage:

  • One does not get the benefits of 0 dep car insurance in the absence of valid car driving license.
  • Zero dep insurance will not cover mechanical breakdowns or normal wear or tear of a car.
  • One won’t get the benefit of 0 dep car insurance when they claim that they met with an accident due to alcohol or drugs consumption.
  • If the car is older than 5 years, zero dep insurance cannot be availed.

Ways to purchase Zero Depreciation Car Insurance

One can easily opt for Zero Depreciation Car Insurance along with a comprehensive car insurance policy initially while purchasing a new car or as an add-on cover online while renewing the car insurance. In just one simple click of Zero or Nil Depreciation Add-on while processing for comprehensive car insurance plan, you can avail this policy. Usually, it is offered as an add-on to the comprehensive car insurance plan. Comprehensive car insurance covers for third party and own damages. One can customize the level of coverage further by opting for add-ons like zero depreciation insurance cover. 


A comprehensive car insurance policy is no wonder a decent choice to prevent your car from all the uncertainties. But even after claims policy holders still must pay the depreciation of the car’s parts. Therefore, choosing a zero-depreciation coverage along with comprehensive car insurance is a better choice as it not only prevents you from paying any additional amount for depreciation but also ensures maximum coverage during claims.

Just being certain that the you are backed by the insurance company during the time of emergency can be very satisfactory and gives you a sense of sheer peace.

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