When you file a standard car insurance claim, the insurer does not pay the full cost of replaced parts. Instead, they deduct depreciation based on the age and material of the parts (for example, up to 50% for rubber, nylon, and plastic parts, and up to 30% for fiber glass). A Zero Depreciation add-on cover eliminates these deductions, ensuring a nearly complete payout during claim settlement.
Zero Dep vs Standard Insurance
Under a standard comprehensive policy, if your car's bumper (which is plastic) gets damaged in an accident and needs replacement, you would have to pay 50% of the cost of the new bumper from your pocket due to depreciation. With a Zero Depreciation add-on (also known as Nil Depreciation or Bumper-to-Bumper cover), the insurer pays for the entire cost of the part, leaving you to pay only the standard compulsory deductible.
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Age Limits and Claim Caps
Zero Depreciation covers are typically offered for vehicles up to 5 years old. Some premium insurers extend this to 7 or 10 years for high-end luxury vehicles. Additionally, look out for the number of claims allowed under this add-on per year; while some policies offer unlimited zero-dep claims, others restrict it to two claims per policy term.
- Zero dep is highly recommended for brand-new cars, luxury vehicles, and vehicles driven in high-traffic urban areas.
- Check if the policy restricts the number of zero-dep claims you can make in a single year.
- Remember that glass parts carry zero depreciation even under standard comprehensive policies.
- Compulsory deductibles (usually Rs. 1,000 or Rs. 2,000 depending on engine capacity) still apply to zero-dep claims.
