Difference Between Third-Party Car Insurance vs Zero Depreciation Cover

There is no option when it comes to a basic Third-party cover - you must buy it as it is mandatory. The question is, whether you want to buy it as a standalone policy or as a part of the Comprehensive cover. A Third-party policy does not offer ‘Own Damage’ cover, but a Comprehensive plan covers it.

Instances such as theft and damages to the insured car due to accidents, fire, calamities, flooding, etc. are covered in an Own Damage plan. Whether you want just the simple Third-party plan or a wide-ranging Comprehensive cover with a Zero Depreciation Add-on, you can buy the cover of your choice easily thanks to online car insurance.

In case you opt for a Comprehensive cover, the option to purchase useful add-on covers like Zero Depreciation also becomes available. You can base the decision on the car’s age, usage, and budget. If you are someone who wants extra coverage, then going for a Comprehensive Policy with add-ons like Zero Depreciation seems like a better option.

1. Third-Party car insurance is simple and easy to comprehend.

2. Buying it fulfils mandatory requirements as per The Motor Vehicles Act.

3. Penalties can be avoided by holding an active Third-party policy.

4. Price and coverage remain the same across insurers, so there is no need to compare plans based on premium and coverage.

5. You get basic coverage at a nominal cost with this policy.

Depreciation can be understood as a reduction in the value of an asset over a period. This usually happens due to wear and tear with time. While settling claims, the insurer considers depreciation of the vehicle’s parts. As a result, the claim amount is less.

A Zero Depreciation Cover is an additional cover that can be purchased only with a Comprehensive Car Insurance Policy. It comes at an extra cost. With the Zero Depreciation Car Insurance Add-on, the insurer does not consider depreciation and the claim amount is more.

Different insurance companies offer this add-on at different prices—there is no standard pricing for this add-on. Buying this is completely optional and should be driven by need.

1. It offers additional coverage at a marginal cost.

2. You can expect a relatively higher claims pay-out with this add-on as compared to a policy without it.

3. The add-on’s terms and conditions are simple to comprehend.

4. You can choose to have this for one year and skip it for the next year - it is flexible.

5. Zero Depreciation is widely available across most motor insurance companies.