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  • Overview
  • What-is
  • Zero Dep Cover
  • How Zero Dep Works
  • Car Insurance Add-Ons
  • Key Features
  • Eligibility
  • Eligibility
  • Types of Policy
  • Who Should Opt
  • How to Buy/Renew
  • Zero Dep Companies
  • Premium Calculation
  • Depreciation Rates
  • Zero Dep vs Comprehensive
  • How to File Claim
  • Insurance Plans
  • Paying for Claim
  • Conclusion
  • Car Manufacturers
  • FAQs

Zero Depreciation Car Insurance

You have just bought a brand-new car - but a few months later, a minor accident leaves your bumper badly damaged. Upon filing a claim, you expect your insurance to cover the full repair cost, but you are instead left surprised and frustrated. The simple reason: While filing a claim, most standard car insurance policies will deduct the depreciation value of your car - so you end up paying a majority of the car’s repair bills from your own pocket! Here is where Zero Depreciation Cover for your car insurance helps bring the change. So, how does this add-on affect your insurance?

What is Zero Depreciation in Car Insurance?

Zero depreciation is an add-on cover for your car insurance policy where the total cost of repair or replacement of car parts can be claimed by the policyholder, in case of accidental damage. Simply put, you don’t pay depreciation on eligible parts during claims. This add-on is mostly incorporated in comprehensive car insurance policies to ease the financial burdens caused by the wear and tear of your vehicle.

How Zero Depreciation Cover Makes A Difference

  • Without Zero Depreciation Cover

  • The insurer subtracts the depreciation of the car, so you have to pay part of the repair bill.

  • With Zero Depreciation Cover

  • The insurer pays the full cost for parts (minus standard deductible), so your personal expenses are minimised.

    Zero Depreciation Cover brings with it the following features:

  • Full claim on plastic, metal, fibre parts

  • It allows you a full claim amount on replacement or repair of vehicle components of plastic, metal, fibre, etc, without depreciation deductions.

  • 2 claims per year

  • Most policies generally allow 2 zero-depreciation claims per year for your added convenience.

  • Ideal for cars ≤ 5 years/luxury vehicles

  • If your car is less than 5 years old, whether new, luxury or driven in high-risk areas, it is important to opt for this cover.

How Zero Depreciation Cover Works

Zero Depreciation Car Insurance works in a simple three-step process:

  • Step 1: File an Own-Damage Claim

  • Begin by reporting the accident or damage to your insurer.

  • Step 2: Zero Depreciation Cover Kicks In

  • After the claim, the insurer will ignore depreciation on eligible parts.

  • Step 3: Full Payout

  • Ultimately, you will be able to receive the full cost of parts replaced, minus the standard deductible.

More Car Insurance Add-Ons

No Claim Bonus Cover
No Claim Bonus Cover
Engine Protection Cover
Engine Protection Cover
Consumables Cover
Consumables Cover
Key Protection Cover
Key Protection Cover
Personal Accident Cover
Personal Accident Cover
Daily Allowance Benefits
Daily Allowance Benefits
Cover Your Car Accessories
Cover Your Car Accessories

Key Benefits of Zero Depreciation Add-On Car Insurance

Here are the key benefits of why the Zero Depreciation add-on is a must-have to incorporate into your car insurance policy:

  • Budget-Friendly Add-On

  • Even though incorporating this add-on slightly increases the premium, the cost of this add-on itself is low and affordable to purchase.

  • Full claim refunds

  • While filing a claim, this cover provides comprehensive protection for expensive vehicle components like plastic, rubber, metal, and fibre parts.

  • Added Financial Protection

  • By providing an increased amount for claim settlement, it helps cover repair costs so you do not have to pay for them from your pocket, enhancing financial safety.

  • Better Resale Value

  • If the car is well-maintained and you choose to sell it, it provides an improved resale value.

  • Great for new, luxury, or heavily driven vehicles

  • For those car owners who have purchased new, luxury or frequently drive their cars, this cover is a means to ensure added financial protection against damages.

  • Ensures Peace of Mind

  • With the help of this policy, there is overall protection provided that saves on out-of-pocket expenses, so you can drive without stress and also save for the long term, with no surprises during claims.

Eligibility for Zero Depreciation Add-On

Every insurer’s policy terms may vary regarding coverage and benefits. That is why it is important to read the fine print about this policy, including certain factors about eligibility and limits that come with this add-on cover:

  • Age cap

  • When it comes to zero depreciation cover, most insurance policies provide it for cars that are up to 5 years old. However, in some cases, certain insurers may extend to 7+ years if they find that the car is well-maintained.

  • Claim limits

  • Most policies are known to limit the offer to 2 claims for zero depreciation per policy year.

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Exclusions of Zero Depreciation Add-On

Check out the items that are not covered by this add-on:

  • Compulsory Deductibles

  • Mandatory deductibles will not be covered, and only the car’s depreciation will be covered. Deductibles will have to be paid for separately.

  • Consumables

  • No compensation will be provided under this add-on for consumables such as nuts, bolts, screws, gearbox oil, brake oil, lubricants, etc.

  • Replacement of certain parts

  • If not otherwise mentioned in the policy, this add-on will not cover the replacement of certain vehicle parts like tubes or tyres.

  • Mechanical or Electrical Breakdown

  • This cover will not be provided on account of regular wear and tear, or due to sudden failure of the engine or mechanical issues.

  • Driving Under Influence

  • Damages arising to the car if the driver is in an intoxicated state, under the influence of alcohol or drugs, will not be covered in the repair bill.

  • Driving without a valid licence

  • If the driver is found to be driving with an invalid driving license and meets with an accident, the insurance company will not cover the damages.

  • In case of Total Loss

  • In case of an accident that causes the total or constructive loss of a car, zero depreciation cover will not apply during claim settlement, but the current market value will be considered.

Types of Car Insurance Policy

Reliance
Third Party Car Insurance
HDFC ERGO
Comprehensive Car Insurance
HDFC ERGO
Own Damage Car Insurance

Who Should Opt For Zero Depreciation Cover

Zero Depreciation add-on becomes vital to purchase for the following people:

  • New Drivers or Car Owners

  • For newly-learned drivers, who are fearful of driving or those who have just purchased a new car, this cover becomes beneficial for enhanced protection against any damages that may arise.

  • Luxury Car Owners

  • Owners of luxury or high-end cars need this cover as, during claims, these cars require expensive parts to be repaired or replaced, which will increase the overall repair costs.

  • Drivers in High-Risk Areas

  • Those living in dangerous areas prone to accidents or natural disasters may have a higher risk of their car getting damaged, and will require this add-on cover.

  • Frequent Travellers

  • This cover is also valuable for those who commute often, either for long drives or work, and may have to face busy roads, constant traffic and minor damage (like dents or bumps) to their cars.

It provides good ROI - the slightly extra premiums you will pay will make up for the repair costs, especially for new or luxury car owners.

How to Buy/Renew Zero Dep Car Insurance Online from Coverfox?

The process of buying or renewing Zero Depreciation Car Insurance Online is made easy through Coverfox. Simply, follow the steps below:

  • Visit Coverfox

  • Go to the Coverfox website or access the app.

  • Select Car Insurance Renewal

  • Navigate to the 'Car Insurance' section and choose the option for policy renewal.

  • Enter Vehicle Details

  • Provide your vehicle's details like registration number, model, and make of the car.

  • Choose Zero Depreciation Add-On

  • While renewing, select the Zero Depreciation add-on cover to include it in your policy.

  • Review and Compare Policies

  • Review the available policies and select the one that suits your requirements, ensuring it includes Zero Depreciation coverage.

  • Make Payment

  • Proceed to pay for the renewal by selecting the preferred payment method.

  • Verify Details and Confirmation

  • Verify all the details provided before finalizing the renewal. Once done, you'll receive a confirmation of the renewed policy.

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Zero Depreciation Car Insurance Companies 2025

HDFC ERGO Car Insurance
HDFC ERGO Car Insurance
Reliance Car Insurance
Reliance Car Insurance
Oriental Car Insurance
Oriental Car Insurance
Bharti AXA Car Insurance
Bharti AXA Car Insurance
Digit Car Insurance
Digit Car Insurance
Kotak Car Insurance
Kotak Car Insurance
Royal Sundaram Car Insurance
Royal Sundaram Car Insurance
National Car Insurance
National Car Insurance
SBI Car Insurance
SBI Car Insurance
Liberty Car Insurance
Liberty Car Insurance
Magma HDI Car Insurance
Magma HDI Car Insurance
Shriram Car Insurance
Shriram Car Insurance
Universal Sompo Car Insurance
Universal Sompo Car Insurance
ICICI Lombard Car Insurance
ICICI Lombard Car Insurance
Edelweiss Car Insurance
Edelweiss Car Insurance
United India Car Insurance
United India Car Insurance
Bajaj Allianz Car Insurance
Bajaj Allianz Car Insurance
IFFCO TOKIO Car Insurance
IFFCO TOKIO Car Insurance
New India Assurance Car Insurance
New India Assurance Car Insurance
Acko Car Insurance
Acko Car Insurance
Tata Aig Car Insurance
Tata Aig Car Insurance
Cholamandalam MS Car Insurance
Cholamandalam MS Car Insurance
L and T Car Insurance
L and T Car Insurance
Future Generali Insurance
Future Generali Car Insurance

Premium and Cost Calculation for Zero Depreciation

Incorporating a zero depreciation add-on cover will slightly increase the car insurance premium. However, there are certain other factors that will also play a role in impacting the premium amount. These are:

  • Car Age

  • This cover is directly dependent on the age of your car. For this reason, the older the age of the car, the higher the premiums will be imposed.

  • Make and Model of Car

  • Depending on the make and model of the car, the parts used by these cars will differ as well. Luxury or high-end cars will have higher premiums due to their expensive parts and the costs required to repair them.

  • Geographical Location

  • Based on the location the driver lives in, the premiums will be higher if the area is more prone to risks—including accidents and natural disasters.

  • Fuel and Engine Type

  • diesel, CNG or electric. It will also increase for engines with higher cubic capacity.

  • Installation of Accessories

  • There will be a different calculation for premiums if any new accessories or features are installed in the car.

  • Claim History

  • Based on the claim history of the driver, if it is found that there is a high number of claims or accidents involved, the premium will automatically increase.

Depreciation Rates in Car Insurance as per IRDAI

The Depreciation rates for cars depend upon two factors: age and parts of the car. IRDAI (Insurance Regulatory and Development Authority of India) has set the depreciation rates for various cars based on these two factors to make it easier for both insurers and policyholders. Let us check them through the table below:

Car Age (for IDV calculation)


Car Age Depreciation Rate (As per IRDAI)
Less than 6 months
5%
6 months to 1 year
15%
1 year to 2 years
20%
2 years to 3 years
30%
3 years to 4 years
40%
4 years to 5 years
50%
More than 5 years
Based on agreement with insurer

Metallic Parts (for repairs)


Age Depreciation Rate (As per IRDAI)
Less than 6 months
Nil (0%)
More than 6 months to 1 year
5%
More than 1 year to 2 years
10%
More than 2 years to 3 years
15%
More than 3 years to 4 years
25%
More than 4 years to 5 years
35%
5 years to 10 years
40%
More than 10 years
50%

Component Type (all ages)


Part Type Depreciation Rate (As per IRDAI)
Rubber/Plastic/Nylon/Batteries
50%
Fibre Parts
30%
Glass Parts
Nil (0%)
Wooden Parts
5% in 1st year, 10% in 2nd year, etc.
Paintwork
50% on material cost

Zero Depreciation vs Comprehensive Insurance

Let us see how Zero Depreciation cover stands out when incorporated into a comprehensive car insurance, compared to a standard comprehensive car insurance:

Feature Regular Comprehensive Insurance Comprehensive Insurance with Zero Depreciation Add-On
What it covers
Damage to your car, theft, fire, and natural disasters Same as regular insurance, plus full repair cost without depreciation
Depreciation charges
Depreciation is deducted from your claim No depreciation deducted—you get the full repair cost
Claim amount
Lower payout because depreciation is deducted Higher payout as you only pay the deductible, no depreciation
Premium cost
Lower premium Slightly higher premium because of extra coverage
Car age eligibility
Usually covers cars up to 15 years old Usually for cars up to 5 years old (sometimes more with some insurers)
Who should buy it?
Good for older cars or budget buyers Best for new or luxury cars and those who want better protection
Extra add-ons
Can add other covers like engine protection Zero Depreciation is an add-on which can be combined with others
Out-of-pocket expenses
You may pay more for repairs due to depreciation You pay less since depreciation charges are waived

In all, a zero or nil depreciation add-on helps you get the full repair cost without deductions for wear and tear. While it may cost extra, it helps you save money on repairs, especially if your car is new or expensive.

How to File a Claim with Zero Depreciation Add-On

The claim process can be carried out in 3 smooth and hassle-free steps:

  • Step 1: Report Claim

  • Notify the insurer after the damage or accident occurs.

  • Step 2: Select Zero Depreciation Add-On

  • Confirm your add-on is active so you can use it.

  • Step 3: Repair at Network Garage

  • Get the necessary repairs done, and the insurer will settle the full eligible amount (minus the deductible) directly with the garage.

Top Car Insurance Plans Available on Coverfox

Tab 1
Tab 2
Carousel plan image
tag
Reliance General Insurer
Amount Covered: ₹ 1 Lakh
Deal Price: ₹ 2,094 / Year
Waiting period: 4 yrs

Disclaimer - Above mentioned prices are for a 2 years old Maruti Wagon R, 1.2 VXI AMT OPT (1197 CC) registered in Mumbai & previous policy has expired.

How Much Do You Pay from Your Pocket in Case of Claim?

Under a Zero Depreciation Car Insurance policy, the out-of-pocket expenses in case of a claim are significantly reduced compared to a standard policy. However, there might still be certain costs that the policyholder might need to bear:

  • Deductibles

  • Some policies have deductibles, which are the portion of the claim amount that the policyholder agrees to pay before the insurance coverage kicks in. Zero Depreciation cover usually reduces deductibles, but they might still exist, requiring a payment from the policyholder.

  • Non-Covered Expenses

  • Certain expenses might not be covered even under Zero Depreciation cover, such as consumables (like engine oil, nuts, bolts), consequential damages, or costs exceeding the policy's coverage limit.

  • Policy Terms

  • The extent of coverage and specific terms can vary between insurers and policies. Always review the policy document to understand any clauses or exclusions that might require out-of-pocket payments.

Take the following example of how much difference a zero depreciation cover makes when it comes to a claim settlement:

Scenario Bumper Repair Cost Depreciation Deducted Deductible Your Out-of-Pocket Cost Your Out-of-Pocket Cost
Without Zero Depreciation ₹7,000 50% on plastic parts (₹3,500) ₹1,000 ₹2,500 ₹4,500
With Zero Depreciation ₹7,000 None ₹1,000 ₹6,000 ₹1,000

In this way, a zero deprecation cover not only helps enhance your payout for claims but also reduces your personal expenses.

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Conclusion

A Zero Depreciation add-on will come at the cost of slightly higher premiums, but it will be worth it - as this add-on will cover your full repair costs, reduce your expenses and allow you peace of mind, especially for new or luxury car owners. So why wait? Head over to Coverfox and avail of a Zero Depreciation Add-On Cover to enhance your Car Insurance Policy today!

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Frequently Asked Questions

  • Q. What is Zero Dep Insurance?

    • Zero dep insurance cover, also known as Zero Dep policy, is a type of insurance cover which offers complete coverage without factoring in depreciation value of the vehicle. This means that if your car gets damaged in an accident, you will receive the entire cost from the insurer.

  • Q. Is zero depreciation cover different from the standard cover? How?

    • The biggest difference is that a zero depreciation cover promises full settlement coverage. On the other hand, a standard comprehensive cover tends to estimate the coverage based on the 'current value' of your vehicle. The current market price of your car plays an important role in the depreciation of the vehicle. If at all you have wrecked your car in an accident, your standard policy will pay for the repair expenses after subtracting for depreciation. However, in a zero depreciation policy, your insurer pays without adding depreciation charges.

  • Q. I heard that zero depreciation cover is more applicable to new cars. Is it true?

    • Usually, only new cars can avail the zero depreciation add-on. Insurance companies define a specific age limit when it comes to zero depreciation. In case your car happens to be older than the particular limit specified by them, then you won't be eligible to use the zero depreciation add-on cover for your car.

  • Q. Is there any restriction on the number of claims? How does a Zero dep insurance policy affect claim settlement?

    • Adding a zero depreciation cover is no doubt very beneficial for a new car. But, remember that it may limit the number of claims you can make annually. A reason for this is because generally, your car is depreciated once a year. It means without the zero-depreciation add-on cover, your insurer would consider depreciation. But as a new driver, don't keep wrecking your car and make claims. It would leave your insurance provider in a fix about paying your expenses time and again regardless of depreciation. Hence, the limit! Again, this clause may vary from one insurance company to another. So, you need to speak to your insurer about this before buying the policy.

  • Q. Can I get Zero depreciation car insurance after 5 years India?

    • Taking into consideration the higher depreciation during the later years, insurance companies normally limit zero depreciation insurance beyond 5 years. Irrespective of this, you should have a word with the insurance company, if they can allow it as an exception for renewal after 5th year based on no claims made before or on the basis of your customer loyalty.

  • Q. How do I understand if the zero depreciation add-on cover is ideal for me?

    • By now you would be aware that the zero depreciation add-on cover is recommended to all brand new cars. Apart from that, a Zero depreciation cover is also essential for:

      • Those who own luxury vehicles as the parts of such cars are very expensive. Obviously depreciation on such parts too would be more.
      • New drivers who aren't confident of their driving skills should opt for this cover.
      • Those who are accustomed to living in accident prone areas where there are high chances of them wrecking their vehicles.
      • If you are super-conscious about small bumps and dents of your car, you should definitely opt for this cover.
      • In case your car is fitted with expensive spare parts, you'd spend a bomb on depreciation of such parts. It's only going to put you into a huge loss
  • Q. What is Zero Depreciation?

    • Zero dep insurance cover, also known as Zero Dep policy, is a type of insurance cover which offers complete coverage without factoring in depreciation value of the vehicle. This means that if your car gets damaged in an accident, you will receive the entire cost from the insurer.

  • Q. Is Tyre Covered under Zero Depreciation Insurance?

    • No, car parts such as clutch plates, tyres, bearings, etc. are not covered under zero depreciation insurance.

  • Q. Is Zero Depreciation Cover worth it?

    • Ans: Absolutely! Investing in this add-on saves car owners from high repair costs, especially for new, luxury, or frequently used cars.

  • Q. Can I get Zero Depreciation cover for cars older than 5 years?

    • Ans: In certain cases, some insurers will make an exception to allow zero depreciation for cars aged up to 7–10 years if the car is well-maintained. However, most standard policies do not provide zero depreciation cover for cars older than 5 years.

  • Q. How many claims are allowed per year?

    • Ans: In general, per policy year, up to 2 claims are allowed. It is advised to check your insurer’s policy terms for the same.

  • Q. Will Zero Depreciation increase my premium?

    • Ans: Yes, zero depreciation cover will slightly increase your premium. However, it is important to note that these extra premium costs will allow you to save up on repair costs for your car further ahead.

  • Q. Does Zero Depreciation cover airbags?

    • Ans: Yes, this add-on covers airbags in case they have been damaged in an accident and need replacement.

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Written By: Coverfox - Updated: July, 2025.
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