Difference between Comprehensive and Zero Depreciation Insurance

Comprehensive Insurance + Zero Depreciation = 100% Satisfaction 😊

Confused because you thought comprehensive insurance and zero depreciation were interchangeable terms? Well, no. Though both Comprehensive Insurance and Zero Depreciation plans protect your vehicle but differ considerably in the coverage they provide.

Zero Depreciation is an ‘Add on’ cover, in other words, an added benefit that can be bought with a Comprehensive Insurance policy. So, basically, Zero Depreciation is an add-on that comes with the Comprehensive Motor Insurance policy but not a complete insurance policy itself.

Let’s understand the whole thing in detail to give you a better understanding.

What is Comprehensive Insurance?

Comprehensive Insurance is the most extensive policy for motor vehicles as it protects both cars and bikes from accidents, theft, natural disasters, and more.

As the name suggests, it’s the ‘complete package’ that covers any damage to the vehicle, its occupants and the ‘third party’ in case of any mishap, while a third-party insurance policy covers damage to only third party. This is the main difference between comprehensive and third party insurance.

By and large, Comprehensive Insurance covers:

Damage to your vehicle due to an accident
Personal injury during an accident
Theft of your vehicle
Damage to your vehicle due to fire
Damage to your vehicle due to natural disasters
Damage to the vehicle or property of a third party due to your vehicle in an accident
Injury to a third party due to your vehicle during an accident
Various add-on covers to provide extended protection to your vehicle

Now, here’s where Zero Depreciation Add-on makes a grand entry!

Since comprehensive insurance is a premium motor insurance policy, you have the option to choose from various ‘Add on’ covers or ‘Benefits’. These covers can be availed at a slight premium over the basic insurance policy cost.

There are plenty of ‘Add on’ covers such as roadside assistance, engine protection cover, consumable cover, etc., and Zero Depreciation is one of the ‘Add on’ covers that you can choose from among a plethora of lucrative added insurance benefits for your vehicle!

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What is Zero Depreciation Insurance?

Zero depreciation add-on cover boosts your comprehensive car insurance policy.

By opting for this cover, you ensure that you will be paid the full repair cost for your damaged bike or car parts. The insurer will NOT deduct any depreciation (decrease in vehicle’s value due to wear and tear and age) cost.

So, this add-on helps you at the time of claim, as you won’t have to shell out extra money from your pocket for repairs. Also, remember that the depreciation amount is calculated as per depreciation rates set by IRDAI.

Difference between Comprehensive Insurance Policy vs Zero Dep Insurance Policy Explained

Comprehensive Policy with Zero Dep Cover

Comprehensive Policy without Zero dep Cover

Premium amount

Slightly higher than a normal comprehensive policy.

Lower than a policy with the Zero Dep addon.

Claim settlement amount

Higher as depreciation is not considered.

Lower as depreciation is considered for all vehicle parts that need to be repaired.

Savings

High long-term savings, as there is no need to pay vehicle depreciation costs during claims.

You only save on the extra premium you won't have to pay for zero dep addon.

Repairing of plastic parts

With the Zero Dep addon, no depreciation is considered for such parts.

50% depreciation on such parts is considered before paying the claim.

Cost of Damage

Your insurer will have to pay the depreciated cost of vehicle parts.

You will have to pay the depreciated cost of vehicle parts.

Age of the covered car

With Zero Dep addon, the depreciation rates are considered as nil.

With age, the depreciation of your car keeps increasing and will not be covered in the claim.

Which is Better – A Comprehensive Policy with or without Zero Dep Cover?

Suppose you own a 3-year-old car and you are eligible for a claim amount of ₹30,000. Now, the insurance company has calculated the total cost of your car part depreciation to be ₹5,000.

Then, if you don’t have zero-depreciation cover with comprehensive policy, you will be paid only ₹25,000 as insurer will deduct the depreciation cost.

However, if you have a zero-depreciation cover then you will receive the entire ₹30,000 as your claim amount!

So, a comprehensive policy without a zero-depreciation add-on is a better choice for you if you own an older vehicle (where depreciation is significant).

While opt for a zero-depreciation add-on if you own luxury vehicles or if you do not want any bummers at the time of claims.

Benefits of Just Buying a Comprehensive Insurance Policy

A comprehensive car insurance is one of the most preferred types of car insurance policies in India

Here’s why you should go for comprehensive insurance:

Complete Protection: A Comprehensive policy protects your vehicle from unfortunate damage and losses in various situations like accidents, theft, vandalism, fire, and natural disasters.
Third-Party Coverage: Provides financial protection if your car causes injury or damage to others in an accident. This can potentially save you from huge legal costs.
Own Damage Coverage: Under the Comprehensive policy, your own vehicle is also covered due to damage arising out of unforeseen incidences.
Add-on covers: You also get some added protection with this type of motor insurance policy as you can buy add-ons for enhanced coverage.

Benefits of Opting Zero Depreciation Cover with Comprehensive Policy

Aging comes with its drawbacks. The same applies to your vehicle. The older it gets, the more the value of your car or bike drops or ‘depreciates’. But, not to fret, this ‘Add on’ ensures that the value of your vehicle will remain as valuable as the day you bought it!

So, here’s why you need a zero-depreciation cover:

Higher Claim Amount: With zero depreciation cover the depreciation on your vehicle parts won’t be calculated. So, you will get the full cost of repairs or replacements for damaged parts, thus, increasing claim amounts.
Save Money: If your vehicle gets damaged in an accident, then with this no cost of wear and tear will be subtracted, implying that you will save depreciation money in the long run.
Better Protection: Buying Zero Dep addon is especially beneficial for you if you’ve bought a new vehicle or own luxury cars and bikes, because in case of expensive parts you will get full financial coverage without depreciation cuts.

Rest assured, with zero depreciation cover your beloved vehicle will always remain 100% as good as new!

Thus, now you know that comprehensive insurance is one of the types of motor insurance in India while zero depreciation cover is an optional add-on that you can buy to get higher benefits with the comprehensive policy.

FAQs about Comprehensive Insurance vs Zero Depreciation

All

Comprehensive vs Zero Dep

Zero Depreciation Insurance

Is comprehensive motor insurance and zero-depreciation the same?

No, they are not the same. Comprehensive insurance covers damage to your vehicle caused by accidents, theft, natural calamities, etc., by calculating the depreciated value for parts. Whereas zero depreciation is an add-on that gives you the full cost of new parts, without considering depreciation.

Can I change the comprehensive insurance policy to zero depreciation?

No. Zero depreciation cover is purchased as an add-on along with the Comprehensive Insurance policy; therefore, one cannot be changed into another.

Is it a good idea to have zero-depreciation insurance?

Yes, zero-depreciation cover is highly beneficial for vehicle owners, especially those with expensive new cars or those living in accident-prone areas. This is because zero dep cover ensures they get higher claim amounts as depreciation cost of repair parts is not considered.

Can I buy Zero Depreciation add-on with third-party insurance?

No, the option to buy zero-dep insurance cover is only available with a comprehensive car insurance policy and not with a third-party policy. Remember that you cannot buy add-on with a third-party policy.

Who should opt for a Zero Depreciation Cover?

If you are buying a Comprehensive Insurance Policy, you should opt for zero dep add-on. However, remember that in India most insurers do not offer this coverage after 5 years, so its best to check with the insurance company before buying.

What things affect the Zero Depreciation Insurance Premium?

Following factors affect the premium of zero dep addon cover:

Age and model of your vehicle
Location of your vehicle
Fuel-type and engine
Coverage and add-ons opted for

Does zero depreciation affect the IDV of the vehicle?

No, zero dep cover doesn't affect the IDV itself; it only ensures that you get the full cost of repairs for the damaged parts. Whereas the IDV represents the vehicle’s depreciating value over time. So, even with zero depreciation, your IDV will still decrease over time as your car depreciates.

Can I transfer the Zero Depreciation cover to the new owner?

Yes, since the comprehensive insurance policy covers the vehicle and not the person, all the add-ons purchased will also be automatically transferred to the new owner. However, the vehicle registration number should be the same.

What is not covered under Zero Depreciation cover?

Zero depreciation doesn't cover regular wear and tear, replacement of fluids, lubricants, etc., electrical/mechanical breakdown, and damages due to driver negligence.

What is the difference between Zero Depreciation and Own Damage Covers?

Both add-ons cover repair for your own damaged vehicle parts. However, in the Own Damage policy the depreciation value on parts is subtracted so you receive less claim amount than that under Zero Depreciation Cover. This is because zero dep doesn’t consider depreciation.

Is zero depreciation available for old vehicles as well?

No, zero depreciation add-on is not available for vehicles more than 5 years old, and for some insurance companies, beyond 7 years. Please check with your insurer beforehand.

What add-on covers are available with Comprehensive Car Insurance policy?

At Digit, you can choose from various add-on covers including Zero Depreciation Cover, Breakdown Assistance, Tyre Protect Cover, Engine & Gearbox Protection, Return to Invoice Cover, Consumable Cover, and Passenger Cover.

Which insurance type is better if I have an old car?

For cars older than a year, a regular comprehensive car insurance plan is the best choice as it will cover third-party liabilities as well as own damage.

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