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Home / Car Insurance / Difference Between Third Party vs Zero Depreciation Car Cover

Difference Between Third-party Car Insurance vs Zero Depreciation Cover

Third Party Vs Zero Depreciation

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We conduct a lot of research while buying a new car. However, we often neglect the intricacies involved in buying car insurance. Most often, many tend to ignore the fact that it is not necessary to succumb to the dealer’s suggestion and rather choose a policy that suits your requirements. It is, therefore, crucial to understand different types of car insurance policies such as Third-party Liability policy and their benefits. Read ahead to dive into details of a Third-party Insurance policy and add-ons such as Zero Depreciation Cover to help you make a wise decision.

Difference Between Third-party Car Insurance vs Zero Depreciation Cover

The fundamental difference when it comes to Third-party Car Insurance Policy vs Zero Depreciation Cover is that of a ‘Policy’ and an ‘Add-on’. A Third-party Liability Plan is an insurance ‘policy’ whereas a Zero Depreciation Cover is an ‘add-on’, and not a stand-alone policy.

Zero Depreciation Add-on needs to be clubbed with a Comprehensive Car Insurance Policy. Some insurers such as ACKO might offer the Zero Depreciation Cover as a part of the Comprehensive Plan, for example, Zero Depreciation Comprehensive Policy.

What is a Third-party Liability Car Insurance Policy?

Third-party car insurance policy is a mandatory requirement if you want to drive your car on Indian public roads. Not having this policy or driving with an expired one can lead to monetary fines and legal hassles.

Third-party policy covers you against financial liabilities in case your insured vehicle damages someone else’s property/vehicle or causes death/injuries to them. The premium for such a policy is regulated by the Insurance Regulatory and Development Authority of India (IRDAI).

What is Zero Depreciation Cover in Car Insurance?

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 Zero Depreciation add-on cover at different prices - there is no standard pricing for this add-on. Buying this is completely optional and should be driven by need.

Difference between Third-party Car Insurance Policy vs Zero Depreciation Insurance Add-on

The following table will highlight major differences between 3rd party car insurance vs Zero Depreciation Cover. For a detailed explanation concerning the policy’s coverage, you can refer to the respective Policy Wordings.

Pointers Third-party Policy Zero Depreciation Cover
Nature This is a stand-alone policy. This is not a stand-alone policy; it is additional coverage that needs to be purchased along with a Comprehensive plan.
Scope Covers you against legal liabilities arising out of injury or damages (concerning the insured car) to third parties or their property. Negates the calculation of depreciation while settling claims, thereby offering a higher claim amount to you.
Pricing The premium for this policy is determined by the Insurance Regulatory and Development Authority of India (IRDAI). The premium for this add-on is determined by individual insurance companies.
Compulsion This is a mandatory legal requirement. This is a voluntary cover and there is no compulsion to purchase it.
Coverage It is a basic coverage at nominal cost. It is an additional coverage at marginal cost.

Which Type of Insurance Cover is Right for You?

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.

Frequently Asked Questions

This section is all about common questions related to covers, inclusions, and exclusions concerning different types of car insurance policies.

Generic FAQs

I want to buy the Zero depreciation add-on cover with a Third-party plan. Can it be done?

No, a Zero Depreciation cover cannot be purchased with a Third-party car insurance plan. It can be purchased with a Comprehensive Car Insurance policy.

Is the Zero Depreciation add-on available for six months?

Seems unlikely, as Zero Depreciation Add-on is usually available for a year.

Do all car insurance companies offer a Third-party Liability policy?

Yes, all car insurers offer the Third-party car insurance policy via the online mode or the offline mode. To buy on ACKO, just visit the website or download the mobile app, answer a few questions and you are all set. You can purchase a Third-party Liability policy in just 2 minutes on ACKO. 

Where can I know about the detailed terms and conditions of the Zero Depreciation add-on?

Details about the car insurance policy and its elements like add-ons are mentioned in detail in the respective Policy Wordings. You can access the same on our website. If you are finding it difficult to do so, drop an email on [email protected] and request assistance.

What is a Third-party Car Insurance Policy?

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Meaning

Third-party Liability car insurance is a mandatory requirement if you want to drive your car on Indian public roads without any issues. This is the policy that authorities check when they ask you to show your insurance papers.  

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Implications

Not having this policy or driving with an expired one can lead to monetary fines and legal hassles. Unfortunately, if you are involved in a car accident and are not covered by this compulsory cover, then things can get a lot complicated for you from a legal standpoint.

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Coverage

Third-party policy covers you against financial liabilities in case your insured vehicle damages someone else’s property/vehicle or causes injuries to them. It also covers the death of a third-party in an accident while driving your insured vehicle.

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Premium Amount

The premium for such a policy is regulated by the Insurance Regulatory and Development Authority of India (IRDAI). It is based on the car’s engine cubic capacity. All insurers charge the same for issuing a Third-party car insurance policy.

Features and Benefits of Buying a Third-Party Car Insurance

Here is a list of benefits associated with 3rd party car insurance.

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.

What is Zero Depreciation Cover in Car Insurance?

What is Depreciation?

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.

Zero Depreciation Cover

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.

Premium Amount

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.

Features and Benefits of Buying a Zero Depreciation Car Insurance Add-on Cover

Here are the major benefits associated with the Zero Depreciation Cover.

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.

CIN: U66000KA2016PLC138288

IRDAI Registration No: 157

Category: Non-Life Insurance

The use of images and brands are only for the purpose of indication and illustration. ACKO claims no rights on the IP rights of any third parties. The ratings are derived from reviews and feedback received from Google and Facebook users on their respective platforms. | *Savings of upto Rs. 50,000 have been calculated on the IDV of Rs. 18,00,000 and 0% NCB. Amount saved is in comparison to tariff rates. Product name: Private Car Policy - Bundled | UIN: IRDAN157RP0014V01201819 |

Trade logo displayed above belongs to ACKO Technology & Services Pvt Ltd and used by ACKO General insurance Limited under License. For more details on risk factors, terms, conditions and exclusions, please read the policy wordings carefully before concluding a sale.