Zero Depreciation Car Insurance
Third-party premium has changed from 1st June. Renew now
I agree to the Terms & Conditions
Our WhatsApp number cannot be used for calls. This is a chat only number.
Third-party premium has changed from 1st June. Renew now
I agree to the Terms & Conditions
Zero Depreciation add-on cover in a comprehensive car insurance policy ensures that the insurer covers the depreciation amount on the assessed parts as per the policy document. The benefits under the add-on can be utilized up to a maximum of specified number of times during the policy period.
Without the zero depreciation add-on cover, all insurers account for depreciation on your car's parts and settle your claim after making the necessary deductions on account of depreciation. Having the add-on cover will ensure that there are no deductions for depreciation of parts.
Note: Zero Depreciation add-on cover has been filed as Digit Private Car Parts Depreciation Protect with Insurance Regulatory and Development Authority (IRDA) with UIN number IRDAN158RP0005V01201718/A0009V01201718.
Depreciation is the decrease in cost of your car, due to its natural wear and tear due to its age. The older your car is, the higher is its depreciation.
According to the Insurance Regulatory and Development Authority of India (IRDAI), following are the depreciation rates, on the basis of which the total depreciation of your car is calculated:
Parts wise |
Depreciation rate (%) |
||||||
Rubber, Nylon and Plastic Parts |
50% |
Fiber Glass |
30% |
Glass |
Nil |
Car Paint |
50% depreciation on the material cost of total painting charges. 25% of the total painting charges (in case of consolidated bill of painting charges) |
Age of Vehicle |
% of Depreciation |
Below 6 months |
Nil |
Exceeding 6 months but not exceeding 1 year |
5% |
Exceeding 1 year but not exceeding 2 years |
10% |
Exceeding 2 years but not exceeding 3 years |
15% |
Exceeding 3 years but not exceeding 4 years |
25% |
Exceeding 4 years but not exceeding 5 years |
35% |
Exceeding 5 years but not exceeding 10 years |
40% |
More than 10 years |
50% |
Under Zero Depreciation add-on cover, certain things in addition to the general exclusions listed under car insurance are not covered. Let us take a look at them in detail:
Following are the factors that will affect the premium of your zero depreciation addon cover:
A comprehensive policy is no doubt a great way to protect your car from all possible damages. However, during claims you will still be required to pay for your car’s part depreciation.
|
Comprehensive Policy with Zero Depreciation cover |
Comprehensive Car Insurance without Zero Depreciation cover. |
What is it? |
A zero depreciation cover is an optional addon you can opt for in your car insurance policy. Having this addon in your plan ensures your insurer won’t charge for your car’s depreciation during claims and hence, you won’t be liable to pay for the cost of depreciation of your car’s parts during claims. |
A comprehensive car insurance policy is a type of car insurance policy that covers for your car’s own damages and third-party damages. This type of policy can further be customized for extensive coverage. |
Premium |
On opting for this addon, your comprehensive car insurance premium will increase by approximately 15%. |
The premium for a standalone comprehensive car insurance policy is lower than that of a comprehensive car insurance policy with addons. |
Cost of Depreciation |
Having a zero depreciation addon means you don’t need to pay for the cost of depreciation during your car insurance claims. |
In a comprehensive car insurance policy, you will be required to pay for the cost of depreciation of your car’s parts during car insurance claims. |
How much do you save? |
While you pay a slightly higher premium, your long term savings are high as you aren’t required to pay for your car’s depreciation costs during claims. |
The only saving you have is the extra premium you would save on by not opting for addons. |
The main role of a zero-depreciation cover during claims is to save the money you’d be spending from your pocket. Let’s take an example to make this simple for you; If your total claim amount payable is Rs 20,000 and the total cost of your car’s part depreciation is Rs 6,000 then, without having a zero-depreciation cover- your insurer will account for this cost and only pay you Rs 14,000. However, if you have a zero depreciation cover then, you will receive the entire Rs 20,000 as your claim amount 😊
Zero Depreciation add on cover policy will not be valid once you have claimed for the specified number of times as mentioned in the policy document.
A Zero Depreciation only covers the cost of your car’s part depreciation during claims and doesn’t cover your compulsory deductibles.
Claim made by the insured under this add on are subject to terms and conditions of your Car Policy.