Benefits & Privileges under Zero Depreciation Car Insurance

Zero depreciation is also known as Nil depreciation. It basically means, If your car or bike gets damaged following a collision, no depreciation is subtracted from the coverage of wear and tear of any body parts of your vehicle.

Insurance providers process a claim after deducting the amount of depreciation on the vehicle’s parts. A zero dep car insurance cover, on the other hand, ensures that you receive the full value of the repair or replacement costs for your automobile, without considering its depreciation. It is a comprehensive car insurance policy with zero depreciation included as an add-on cover.

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What are the benefits of a zero dep car insurance cover?

There are several advantages of this cover, some of which are mentioned below:

  • Increase your savings

When making claims, a standalone comprehensive car insurance plan requires an insured to bear the cost of depreciation on his/her car’s parts. With a zero depreciation add-on, policyholders do not have to shell out money from their pockets as the expenses are borne by the insurance company.

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  • Receive higher claim amount

A zero dep car insurance plan ensures that the amount of depreciation on your car’s parts is not taken into account while making claims. As a result, it allows you to receive a higher claim amount, thereby creating room for more savings.

  • Ensures peace of mind

Alongside eliminating unnecessary expenses from your end, a zero dep car insurance policy assures you that the same will be taken care of by the insurer. In addition, you know that the insurance company will support you during unfortunate times, which gives you much-needed satisfaction and peace of mind.

What is the role of zero dep during claim settlement?

The primary role of this add-on during claim settlement is to save your money. To gain a clearer understanding of the same, take a look at the following example:

Let’s say your payable claim amount stands at Rs. 15,000 and the depreciation on your car’s parts are Rs. 5,000. Therefore, a standalone comprehensive car insurance policy will take this amount of depreciation into account and pay you Rs. 10,000.

On the other hand, a zero dep car insurance plan will not consider this amount and extend the entire Rs. 15,000 as your claim amount.

What are the factors affecting your zero dep car insurance premium?

The factors highlighted below affect the premium of one’s zero depreciation add-on cover:

  • Age of the car

As this add-on is related to a car’s age as well as its parts, the age of the vehicle plays a key role in determining its premium amount. Given that older automobiles are more susceptible to damages, they attract a higher premium amount.

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  • Location of the car

The premium amount also depends on the location where you reside. If you reside in a region that does not experience considerable traffic, you will find affordable premium rates due to lesser on-road risks.

On the contrary, premiums tend to be higher for large metropolitan cities, most of which witness a higher traffic volume throughout the day.

  • Car model

The insurance premium for some car models is higher than that of others. A car’s engine cubic capacity (cc) also determines the premium amount. In fact, the higher a car’s engine capacity, the more is its premium amount.

Similarly, if your car’s engine operates on diesel, you may have to pay a higher premium. Diesel vehicles are more expensive than those that operate on petrol, which increases their IDV and, in turn, the premium.

Further, if your car comes with safety equipment, such as airbags, handle lock, gear lock, GPS tracking device, etc., its risk of getting stolen decreases. Therefore, your insurance premium will take these safety aspects into consideration and offer discounts on the premium.

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Prospective policyholders should also note that zero dep car insurance is only available for vehicles that are less than 5 years old. Therefore, if you are planning to buy a car or have recently purchased one, you can include this add-on to a reliable and comprehensive car insurance plan.


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