Zero Depreciation Car Insurance

Zero Depreciation car insurance meaning stands for an add-on cover under which the insurer does not consider the depreciation cost of damaged parts during claim settlement. In other words, with a Zero Dep cover, you will receive the total cost of car parts during claim settlement. Typically, during claim settlement, an insurer deducts the depreciation value of parts before replacing the damaged parts. However, with this add-on, there’s no such deduction, and you receive the 100% claim.

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.

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.

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.

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.

Step 1: Go to the top of this page or download the ACKO app.

Step 2: Enter your car registration number, verify the vehicle details and click on “View Plans”.

Step 3: 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.

Step 1: Enter the vehicle registration number by going to the top of this page or downloading the ACKO app.

Step 2: Select the Comprehensive Plan with Zero Depreciation cover from the available plans. Step 3: 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.