Zero Depreciation Car Insurance – Everything you need to know

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It is important to have a car insurance if you want to drive a vehicle on Indian Roads and according to Motor Vehicles Act 1988, you can even be fined if you do not have insurance. Hence, it will require that you invest in a policy but try not to do it just because it is a mandatory aspect. Since you are buying a policy anyway, make sure you make it worthwhile for your car and get the best policy for your beloved vehicle.

Buying a car and then maintaining it does involve a lot of expense and you might have to end up paying a lot for the damages and to get the repairs done. It is advisable to opt for a comprehensive car cover and with such a plan, you will ensure that the policy will pay for the repair costs which are incurred if the car faces any damage. However, most are not aware that the car insurance company only pays for the depreciated value of the car’s parts.

Depreciation is a reduction in the value of assets due to the usage of the car. The parts of the car undergo wear and tear when they are used and with time the company will deduct the cost of depreciation, or wear and tear, and then pay the claim. Naturally, this drastically reduces the claim amount and you need to opt for comprehensive policy that will prevent this reduction in claim.

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Hence, what you should be opting for is zero depreciation cover which is a comprehensive cover that will prove to be very useful, especially if you have been using your car for a few years.

With a zero depreciation car insurance policy, also known as a bumper to bumper car insurance, you will get a comprehensive car policy with a zero depreciation add on. This add- on is an additional optional coverage that almost all insurance policies provide. With this add- on, the effect of depreciation is nullified and you will not get a reduced claim on account of depreciation, but will get the full claim value your car is entitled to and it will bear the entire cost of the parts whether replaced or repaired.

The zero depreciation cover is quite beneficial because the depreciation cost eats into your claim amount and you have to end up paying for most of the repair from your own pocket, in spite of having an insurance cover in place. The claim payout in zero depreciation is much higher and therefore helps save your money and is better than a regular comprehensive cover.

Things to remember about Zero Depreciation Car Insurance

  • One should however, remember that zero depreciation is just an add- on and you have to add it separately to your regular comprehensive insurance.
  • It is also important to remember that the premiums for zero depreciation are higher compared to other policies. However, the additional amount is low and quite affordable and depending on the additional costs that it will save you in the future, quite feasible as well.
  • Zero depreciation is available for cars that are up to 5 years old but some insurance companies do cover older cars.
  • One can make only two claims throughout the total coverage period under the zero depreciation cover.
  • The premiums for zero depreciation add- on under various insurers are different and so you need to compare and contrast before you settle in on an insurance company.
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Hence, if your car is not very old, opt for a comprehensive cover with zero depreciation adds- on. Even if you have not got the add-on while buying the car, you may get it later when you renew your insurance.

Shilpa Arora


  1. What is total lose in claim. What may we receive in this place?

    • Thank you for your query. Please define what kind of loss have you faced. In case of motor total loss, the insured gets a maximum of IDV value or replacement of vehicle by the company.

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