Everything You Need to Know About Zero Depreciation Car Insurance In India - Ganna Magazine Blog

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Everything You Need to Know About Zero Depreciation Car Insurance In India

When buying a car insurance policy there are many add-on covers that you can opt for by paying an additional premium, and one such cover is zero depreciation. If you intend to buy a standard car insurance policy, this cover is not included. Whenever there is a claim, as a standard rule depreciation on the car is calculated and deducted from the claim amount depending on the extent of damage to the car. The variance in the current price of the affected part of the car and the depreciated value is the amount that the insurance company does not pay and has to be borne by the insured.

In the case when you have opted for the zero depreciation car insurance cover, when there is any loss or damage to the car, the insurance company calculates the claim value on the total cost and does not take depreciation into consideration. For anyone who is interested to settle the claim in a hassle-free and smooth manner, taking the zero depreciation rider has many advantages. If you can afford to pay the extra premium which the insurance company charges for the cover, you must take this cover as this comes in very handy at the time of buying a new car in case of a loss or damage to the old one.

Depreciation Rate

Every insurer applies a different rate of depreciation but there are a few standard norms, which each one of them follows. There are certain parts of the car, which are said to age at a faster rate and thus, the depreciation on these parts is higher. Thus, the rates applied at the time of the claim depending on the part that is damaged. The rate of depreciation is different for some parts of the vehicle like tubes, tyres, plastic and rubber parts. The depreciation on the metallic parts depends on the age of the car.

Features of Zero Depreciation Car Insurance

There are some important aspects of zero depreciation car insurance cover, which you must understand. Some of these are:


It is not always true that 100% coverage is offered under this add on. Some insurance companies do not cover mechanical breakdown and regular wear and tear and thus, each insured who has taken this cover has to end up paying the compulsory excess.

New Cars

In most cases, the insurance companies offer the zero depreciation rider only on new cars. In this respect, a certain age is specified by the company and any car, which is older than this age does not have the option to take this cover.

Number of Claims

This rule varies from one insurance company to the other, but there is a restriction on the number of claims, which the insured can register in a year under this policy.

Factors to Consider

There are some very essential factors, which one must take into account before opting for zero depreciationadd-on rider. Some of these are:


If you opt for this cover for your car insurance policy the premium payable is bound to be higher when compared to a comprehensive policy. This is because this policy offers an extensive coverage and does not take into account any depreciation and as a result, pays out a higher amount at the time of a claim.

Number of Claims

As most insurers put a cap on the claims that can be filed under this add on cover, it is always advisable to double check the number with your insurer. The insurance companies do not like to have a claim for every little dent and thus, they put a limit.

New Cars

Most of the insurance companies offer this cover for new cars. Also, it should be kept in mind, if this rule is not applicable one must not opt for it if the car is more than five years old as then there is no point to pay a high premium.

Zero depreciation car insurance cover is a must for all new car owners as this will protect them from any loss. The cover must be taken for both old and new drivers, as accidents do not necessarily happen due to your fault.    
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