You can get zero dep insurance after 5 years if your car is in good condition and is eligible as per the insurer's terms. Most insurers do not provide bumper to bumper insurance after 5 years of car ownership due to high repair costs and a high risk factor.
When buying a new car, a zero-depreciation add-on with car insurance is a common go-to purchase to avoid deductions for depreciation when making a claim. But can you buy zero-depreciation car insurance for a car that is more than five years old in India? The answer may surprise you.
Is Zero Depreciation Car Insurance Available After 5 Years?
While some insurers may offer zero depreciation car insurance after five years depending on the condition of the vehicle, most insurers have a cap at 5 or 7 years. If you are looking for zero dep cover for a car older than 5 years, check your insurer’s eligibility criteria, claim limits and the condition of your car.
What Is Zero Depreciation Car Insurance?
Zero depreciation car insurance, or bumper to bumper insurance, is an add-on to a comprehensive car insurance policy. It reduces depreciation deductions on eligible parts replaced during an own-damage claim. Zero dep claims ensure that no depreciation is applied to eligible parts and you get paid in full for those parts.
Why Do Insurers Restrict Zero Depreciation Cover After 5 Years?
Insurers can deny the zero depreciation add-on for older cars based on their policy and terms.
Vehicle condition: Older cars tend to have more wear and tear.
Repair costs: Older cars have higher repair costs due to vulnerable parts.
Underwriting rules: Insurers review vehicle age, condition and claims history when setting eligibility criteria.
Note: These conditions may vary from insurer to insurer.
How to Get Zero Depreciation Insurance for a Car Older Than 5 Years
To get zero depreciation insurance for a car older than 5 years in India, follow these steps:
1. Check Eligibility With Your Current Insurer
Ask whether you can continue zero depreciation cover at renewal. The insurer may check your car's condition, age and claims history.
2. Compare Quotes From Other Insurers
If your current car insurer denies you the zero-depreciation add-on or deems you ineligible, you can compare car insurance plans on Coverfox to check whether another insurer offers the coverage you need.
3. Verify the Add-On Before Paying
Read the policy wording and confirm that zero depreciation cover is included in the policy. Complete any required inspection and check the exclusions before paying.
What Happens to Your Claim if Zero Depreciation Is Unavailable?
Without zero depreciation cover, your insurer deducts depreciation from the cost of eligible parts replaced during an own damage car insurance claim. The deduction reduces your claim payout, and you pay the remaining amount towards the repair.
Depreciation on Replacement Parts
The depreciation applied to replacement parts depends on the component being replaced.
| Car component | Depreciation rate |
|---|---|
| Plastic, nylon and rubber parts, tyres, tubes, batteries and airbags | 50% |
| Fibreglass components | 30% |
| Glass parts | Nil |
For other parts, the rate depends on the policy wording.
These rates apply to replacement parts during a claim. They are different from the age-based depreciation rates used to calculate your car's insured declared value (IDV).
| Age of car | Depreciation for IDV calculation |
|---|---|
| Less than 6 months | 5% |
| 6 months to 1 year | 15% |
| 1 to 2 years | 20% |
| 2 to 3 years | 30% |
| 3 to 4 years | 40% |
| 4 to 5 years | 50% |
| More than 5 years | Mutually agreed between the insurer and policyholder |
What Can You Choose if Zero Depreciation Is Unavailable?
You can renew your comprehensive car insurance without zero depreciation cover and choose other add-ons that suit your needs. Each covers a different expense. These add-ons do not replace zero depreciation cover.
| Add-on | What it covers |
|---|---|
| Engine protection | Specified engine-related damage covered under the add-on, subject to exclusions |
| Consumables cover | Eligible consumables used during covered repairs |
| Roadside assistance | Services such as towing and breakdown assistance, as specified in the policy |
| Return to invoice | Specified invoice-related costs in eligible theft or total loss claims |
Is Zero Depreciation Worth It for a Car Older Than 5 Years?
If an insurer still offers zero depreciation cover for your car, compare the additional premium with the likely depreciation deductions on a repair claim.
For a car with expensive replacement parts, the add-on could reduce your share of the repair cost. But if the premium is high relative to your car's IDV, the extra cover may not justify the expense. Claim limits, exclusions and any inspection requirements can also affect its value.
What Should You Compare Before Renewing?
Premium: While Zero-depreciation saves money on claims, it can be expensive for a 5-year-old or older car.
Claim Limits: Some insurance policies limit zero-dep claims (usually up to 2 for a policy term).
Exclusions: Check which parts are covered under zero-depreciation and which are not.
Policy Wording: Always read the policy wording of the zero-depreciation car insurance to make sure you do not leave any gaps in coverage.
Conclusion
Zero depreciation car insurance after 5 years is possible with some insurers, but it is not guaranteed. Check with your current insurer and compare alternatives if the add-on is unavailable at renewal. If you cannot get it, comprehensive car insurance still covers eligible damage, although depreciation deductions may apply to replacement parts.
Frequently Asked Questions
Can I switch insurers to get zero depreciation cover for my old car?
Yes, you can approach another insurer. Approval depends on its eligibility rules, your car's condition and any inspection requirements.
Does zero depreciation cover eliminate all out-of-pocket expenses during a claim?
No. Deductibles, excluded expenses and other non-payable amounts may still apply, even when zero depreciation cover is active.
Can I buy zero depreciation cover in the middle of my policy year?
This depends on the insurer's terms. Some insurers may require you to select the add-on when purchasing or renewing the policy. Check with your insurer before assuming it can be added mid-term.
