What is zero depreciation in car insurance? Zero Depreciation in car insurance is an add-on that eliminates depreciation costs during claims, ensuring full coverage for own damages. In other words, with a zero dep insurance add-on, the insurance provider will not consider the depreciation costs during claim settlements.
If you have recently purchased a car or own a luxury car, buying a Zero Depreciation cover makes a lot of sense. It will reduce your out-of-pocket expenses in case of damages to your car. Following are some of the reasons to opt for a Zero Dep cover for your car insurance.
If you are living in a high-risk area.
Buy the Zero Depreciation Cover if you have recently learned how to drive a car.
If you own a luxury or expensive car with costly car parts.
Opt for a Zero Dep cover if you need to repair minor damages to keep the car in a top-notch condition.
If you are worried about small dents and bumps or expensive spare parts.
If you don’t have a dedicated parking space, the chances of damage increase. The Zero Dep Insurance will help you cover repair costs for such damages.
If you are someone who wishes to reduce out-of-pocket expenses in case of car damage.
Here are the key advantages of buying a Zero Dep car insurance.
The depreciation rate in cars varies depending on the type of vehicle component and the car’s age. To make things easier for insurers and policyholders, IRDAI (Insurance Regulatory and Development Authority of India) has set the depreciation rate for cars. The following sections provide more details on the same.
| CAR PARTS | RATE OF DEPRECIATION |
| Rubber/Plastic/Nylon/Batteries | 50% |
| Fibre Parts | 30% |
| Wooden Parts | 5% in the first year, 10% in the second year, and so on. |
| AGE OF CAR | RATE OF DEPRECIATION |
| Less Than 6 Months | 5% |
| More Than 6 Months to 1 Year | 15% |
| More Than 1 Year to 2 Years | 20% |
| More Than 2 Years to 3 Years | 30% |
| More Than 3 Years to 4 Years | 40% |
| More Than 4 Years to 5 Years | 50% |
| More Than 5 Years | To be mutually decided between the insurer and policyholder |
| AGE OF CAR | RATE OF DEPRECIATION |
| Less Than 6 Months | Nil |
| 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% |
| Exceeding 5 years but not exceeding 10 years | 40% |
| More Than 10 Years | 50% |
The main difference between Zero Depreciation car insurance and Comprehensive coverage is that Zero Depreciation is an add-on, and Comprehensive coverage is a car insurance policy.
The following table highlights the key differences between Zero Depreciation Cover vs Comprehensive coverage.
| PARAMETER | ZERO DEPRECIATION CAR INSURANCE | COMPREHENSIVE CAR INSURANCE |
| Meaning | An optional add-on while buying Comprehensive Car Insurance. It will ensure the insurance company does not deduct depreciation of car parts before settling the claim for the damages to your car. | A bundle of Third-party Liability Plan and Own Damage Plan. Several add-ons can be included to make it exclusive; however, it considers the depreciation of car parts before settling the claim. |
| Premium | There is a slight increase in car insurance premium, but it ensures there is no depreciation of car parts during claim settlements. | The premium for the standalone Comprehensive Policy is lower than a policy that has add-ons such as Nil or Zero Depreciation. |
| Age of Car | The add-on can be purchased for cars that are less than 5 years old. | The Standalone Comprehensive Car Insurance can be purchased for cars that are less than 15 years old. |
| Depreciation Factor | Depreciation of car parts is not considered while settling claims except for compulsory deductibles. | Insurers consider the depreciation of car parts while settling claims. |
| Savings | While the premium you pay might be slightly higher, the cost of paying for the depreciation of car parts is nullified. | While the premium is lower than that of Zero Dep Car Insurance, you get to save only on the premium you pay. |
You can buy the add-on cover online while purchasing or renewing the car insurance. Buying a Zero Depreciation Car Insurance Policy is a lot easier, thanks to digital insurance providers such as ACKO. Here are the steps to buy Zero Dep cover from ACKO.
Go to the top of this page or download the ACKO app.
Enter your car registration number, verify the vehicle details and click on “View Plans”.
Select Comprehensive Policy with Zero Dep cover and purchase the plan by paying the premium online.
Note: You cannot opt for Zero Depreciation Cover while buying Third Party Car Insurance.
The process of renewing Zero Dep cover is similar to renewing a car insurance policy. You can refer to the following steps to renew the Nil Depreciation cover from ACKO.
Enter the vehicle registration number by going to the top of this page or downloading the ACKO app.
Select the Comprehensive Plan with Zero Depreciation cover from the available plans.
Pay the premium online to instantly renew the Zero Dep cover.
During claim settlement, the insurer will deduct the depreciation applicable on car parts. The rate of depreciation will be mentioned in the policy wording. However, when you claim against Zero Dep car insurance, you will receive the full claim amount without any deduction due to depreciation. Hence, you need not pay out of your pocket for car repairs. The claim process also becomes simple with Zero Depreciation cover as you need not worry about deductions due to the depreciation rate.
Here are the key benefits of buying Zero Depreciation cover online from ACKO.
When you buy on ACKO, you can buy this add-on cover along with a Comprehensive policy. Or you can also buy a Standard Comprehensive plan bundled with Zero Depreciation benefits that are exclusively available on ACKO.
When you buy on ACKO, you directly deal with us. Since there are no middlemen involved, it results in low operating costs. We pass on the benefits to you in the form of low-cost insurance plans.
When you buy on ACKO, you not only enjoy the benefits of the Comprehensive Insurance & Zero Depreciation add-on cover. You can also avail of premium services like free pick-up and doorstep delivery in select cities.
A Zero Dep insurance covers most expenses arising out of damage to your car. However, there are a few exclusions, which are listed below.
FAQs related to Zero Dep Insurance
Have queries related to ACKO’s two wheeler insurance policy? Refer to our Policy Wordings for detailed information or reach out to us via email or phone using the information below
Write to us at [email protected]
Call us on 1800 266 2256
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