Zero Depreciation: A Valuable Add On Cover for Car Insurance

By on October 1, 2018
car insurance online

Depreciation is the reduction in the monetary value of an asset due to aging and regular use. As far as the depreciation of your car is concerned, each year the market value of your car reduces due to this factor.

The older a car is higher will be the depreciation suffered by it. It is not possible to stop your car from getting depreciated. For example, a car which remains in the garage for most of the time will also get depreciated. Its depreciation will be equal to a car of the same age that is in regular use. Depreciation is one of the biggest losses faced by the owner of the insured car.

Depreciation is a major component that affects the claim amount in case the insured car meets with an accident and suffers damage.

What Are Add-ons?

Add-ons, as the name suggests, are additional coverages that can be bought with an insurance policy. Add-ons can only be bought while buying comprehensive insurance for car. They act as extra covers that you can choose depending upon your requirements.

Some Add-ons like Zero Depreciation Car Insurance and Roadside Assistance are beneficial for all policyholders irrespective of their personal needs. On the other hand, Add-ons like Passenger Cover, Accessories Cover, NCB Protector, or Consumables Cover can be chosen based on personal requirements. Add-ons help you customize your policy and are completely optional. It is upon you to decide if you want to buy Add-ons or not when you buy car insurance online.

What Is Zero Depreciation Car Insurance?

As mentioned earlier, the Zero Depreciation Add-on is beneficial for all policyholders. With this cover, the depreciation of your car will not be taken into account while calculating the claim amount. As depreciation can be as high as 50% of the claim amount, the policyholder can suffer huge losses if depreciation is taken into account. With a Zero Depreciation insurance for car, one can expect to receive the maximum amount one has claimed. This reduces the financial burden you may face in case of an unforeseen incident. All you have to do is bear the minimal cost of deductibles and your insurer will take care of the entire remaining amount.

What Is The Difference In Zero Depreciation Car Insurance And Comprehensive Policy?

A basic comprehensive insurance for car differs from the one with a Zero depreciation car insurance. The coverage and benefits offered by a Zero Depreciation Car Insurance are more than the basic policy. Here are the key differences:

Constraint Zero Depreciation Car Insurance Basic Comprehensive Car Insurance Policy
Claim Amount The claim amount will be higher as depreciation is not taken into account. The claim amount will be lower as the depreciation of the car is taken into account.
Repairs The cost of repairing certain parts like fiberglass, rubber, and plastic parts will be borne by the insurer The cost of repairing parts like fiberglass, rubber, and plastic parts will be borne by the policyholder
Cost of the policy Higher Lower
Availability The Zero Depreciation Add-on is available for new cars only The Basic Comprehensive policy can be bought irrespective of the age of the car.

How Is Depreciation Calculated?

In car insurance, depreciation of the car is calculated as per individual car parts. Here is the percentage of depreciation for each part:

  • Fiberglass – 30%
  • Rubber, nylon, plastic parts, tires and tubes, batteries and airbags – 50%
  • Paint Job – 50%

The Zero Depreciation Add-on is ideal for people who simply love their car and cannot bear any dents or scratches on it. Apart from that, people with expensive cars, those who live in accident-prone areas, new drivers, and those who want to receive the maximum claim amount.


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