When you buy a new car, you naturally expect its insurance to offer complete financial protection. But a standard policy may not cover the full repair cost during a claim because of depreciation.
This is where zero-dep car insurance becomes an essential upgrade. It ensures that the depreciation on car parts does not reduce your claim amount, helping you avoid unexpected repair expenses after an accident.
What is Zero Depreciation Car Insurance?
Zero depreciation car insurance is an add-on cover that eliminates the depreciation deduction during claim settlement. Unlike a regular car insurance plan that deducts the depreciated value from the claim amount, zero-dep ensures full cost of replacing damaged parts without taking into account the depreciating value.
This add-on is particularly helpful because car parts like plastic, fibre and metal depreciate quickly. Without zero-dep, you end up paying a significant portion from your pocket each time these parts need replacement. Thus, it is highly recommended to buy a zero depreciation add-on when buying car insurance online or offline.
How Depreciation Affects a Regular Car Insurance Claim?
Every year, your vehicle’s value decreases. Insurers apply fixed depreciation percentages to different parts:
- Plastic Parts: 50% depreciation
- Fibre Parts: 30%
- Metal Parts: Based on the age of the vehicle (0 to 50%)
So, if a plastic bumper worth ₹10,000 needs replacement, a standard policy will cover only 50%, and you will have to pay the remaining ₹5,000 yourself. Over multiple repairs, especially during the first few years of ownership, these costs add up quickly.
Depreciation is the reason many policyholders feel their claim payouts are lower than expected. It is not that the insurer is rejecting the claim, but the deductions reduce the overall settlement amount.
Why Zero Depreciation Cover is a Smart Choice?
Zero depreciation cover removes the headache of calculating depreciation for every damaged part. It benefits you in several ways.
Higher Claim Payout
Because depreciation is not deducted, your out-of-pocket expenses become significantly lower. This is especially valuable for new cars, where parts can be expensive.
Better Coverage for Plastic and Fibre Parts
Modern cars use a large amount of plastic in parts such as bumpers, headlights, mirrors and cladding. These are the very parts that depreciate faster. Zero-dep car insurance ensures these high-depreciation components are still fully covered.
Ideal for New and Luxury Cars
Owners of high-end vehicles or brand-new cars benefit the most from zero-dep car insurance. This is because repair bills for such vehicles are usually higher. Even minor accidents can lead to high expenses without zero-dep.
Useful for High Traffic Driving
If you frequently drive in congested city areas, the chances of scratches, dents and minor bumps are naturally higher. Zero depreciation helps prevent financial emergencies.
Who Should Definitely Consider Zero Depreciation Cover?
- First-time car buyers
- People with new cars
- Drivers who commute daily on traffic-heavy routes
- Luxury and premium car owners
- Anyone who prefers predictable repair expenses
Conclusion
Zero depreciation car insurance ensures you get maximum repair coverage without unexpected reductions due to depreciation. It is a practical add-on for anyone who wants better financial protection, especially during the early years of vehicle ownership. Insurers like TATA AIG offer zero-dep car insurance add-ons designed to minimise repair costs and make claim settlements more transparent and efficient.
