Zero Depreciation Car Insurance in India seems to have come as a blessing in disguise at a time when the no. of accidents happening on Indian roads is increasing significantly. Zero Depreciation Car Insurance Cover is an add-on insurance cover which provides certain additional benefits over and above the Standard Insurance policies.

The requirement for such an insurance in India was rising as the standard insurance policy were not able to cover 100% of the costs involved at the time of repair after an accident. In fact, Mr. Sharma’s Toyota Corolla recently met with an accident and the cost involved for doing the repairs was estimated at Rs. 1,77,000. Mr. Sharma had estimated that this much cost would be incurred for repairs but he was shocked when he came to know that the Insurance Company won’t be incurring all these costs and he would be required to put in Rs. 63000 from his own pocket despite the fact that he had been paying car insurance premium regularly.

This is a normal and frequent case for car owners who have opted for Standard Car Insurance. As Standard Car Insurance Policies don’t provide 100% cover and the owner is required to put in funds from his pocket as well, the demand for a comprehensive vehicle insurance cover had been rising in India which led to the birth of Zero Depreciation Car Insurance.

What is Zero Depreciation Car Insurance?

Zero Depreciation Car Insurance is a top-up add-on cover for your Standard Car Insurance. Standard Car Insurances don’t provide for 100% of the costs incurred for repair after an accident. Only 0 to 50% of the claims of several items like Fibres, Glass, Rubber, Plastics etc are approved under the standard car insurance and the rest of the amount would be required to be incurred by the car owner.

Moreover, they also apply depreciation factor on the cars. As the value of the car keeps on reducing every year, the insurance companies also keep reducing the value of the car in their books. Moreover, in case of an accident, the old and used part would be replaced by a completely new part. Therefore, they don’t provide 100% cash facilitation and only provide benefit up to a certain level.

As Standard Car Insurances weren’t able to provide full benefits of an insurance cover, the IRDA has allowed Zero Depreciation Car Insurances to be introduced in India which cover all costs that would be incurred in case of an accident.

Benefits of Zero Depreciation Car Insurance

If the Car Insurance opted by the Insurer is Zero Dep., in such cases – 100% of the amount incurred at the time of repair after an accident would be paid by the insurance company. Moreover, Zero Dep. Car Insurance also covers Plastics, Glass, Fibre, Nylon etc which are barely covered under the Standard Car Insurance.

However, such additional benefits also come at a cost and the premium for Zero Depreciation Car Insurance is usually higher than the premium for Standard Car Insurance. However, the benefits that come with Zero Depreciation Car Insurance are worth paying the extra premium. The difference in the car insurance premium of standard car and zero dep. can also be compared online on various websites like Policy Bazaar, Carwaleand Zigwheels etc

Moreover, this type of zero depreciation car insurance in India also brings satisfaction to the minds of the car owner that all costs would be covered and he won’t be required to incur any expense in case of any damage due to accident.

There are some people who are not in favour of such full claim add-on car insurance policies as they lead to rash driving on the road as the owner knows that he won’t be required to pay any expense in case of any damage. However, only a small no. of people have this thought and a majority believe that this is not the case. Read the whole discussion here.

Other Relevant Points for Zero Depreciation Car Insurance

  1. Zero Dep Car Insurance is only available for cars which are less than 5 years old (Depending on the car and the Insurance provider). Once this period lapse, zero depreciation won’t be available and the only option available after this would be standard insurance.
  2. As 100% of the damages are being paid by the Insurance Company, this does not mean that you can claim damages every day. Most insurers also have a maximum limit on the no. of times the damages can be claimed per year.
  3. Most insurance providers provide this type of insurance only for private vehicles and not for commercial vehicles.
  4. The accessories fitted in the car which are not a part of the standard product are usually not covered under Zero Depreciation Car Insurance. Some insurers also don’t include Tyres and Batteries under Zero Dep Insurance Cover.
  5. Damage due to Mechanical Breakdown and normal Wear & Tear is also not covered.

A small login charge of Rs. 1000-Rs. 3000 (depending on the car and the insurer) would be applicable every time the damages are claimed. These are also applicable in case of Standard Car Insurance.