Zero Depreciation Car Insurance|Coverage & Benefits

By Okbima 21 Nov 2023


Zero Depreciation car insurance, also known as bumper-to-bumper or nil depreciation cover, is a type of coverage that offers a significant advantage to policyholders. When you have zero depreciation coverage, you don't need to worry about paying for the depreciation value of damaged or replaced parts of your car. This means you can claim the full amount under your comprehensive car insurance.

What is Zero Depreciation Car Insurance?

Zero Depreciation in car insurance is an add-on cover where the insurance company doesn't charge you for the natural wear and tear of your car, known as depreciation. With a zero depreciation add-on, you can claim the entire cost of replacing parts in case of accidental damage without worrying about the depreciation value being snatched away from your claim amount. It's like getting the full worth of your car parts, no strings attached. In addition, the coverage only applies to vehicles under 5 years of age, and the policyholder may utilize it twice throughout the policy's duration.


Best Zero Depreciation Car Insurance Plans in India

Zero depreciation car insurance, also known as nil depreciation car insurance, is an add-on cover that allows you to claim the entire cost of replacing car parts in the event of an accident, without any deductions for depreciation. Below we have mentioned some of the best zero depreciation car insurance:




Claim settlement ratio


Tata AIG

Comprehensive and standalone damage


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ICICI Lombard

Comprehensive and standalone damage


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Bajaj Allianz

New and old cars


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Comprehensive and standalone damage


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What is the Benefit of Zero Depreciation Car Insurance?

The primary benefit of Zero Depreciation Car Insurance lies in its ability to provide more comprehensive coverage for your vehicle, minimizing financial setbacks in the event of a claim. Here are the key advantages of opting for Zero Depreciation Car Insurance:

• Increases the Claim Settlement Amount

When you opt for the Zero Depreciation Car Insurance Add-On, you're not just covering your car repairs; you're maximizing your claim settlement. Here's how it works: if your car needs Rs. 30,000 in repairs, regular insurance might only cover Rs. 15,000 after subtracting depreciation. But, with the Zero Depreciation Add-on, your insurer settles the full claim amount of Rs. 30,000. It's like getting the maximum value for fixing your car.

• Protects from Financial Loss

Zero Depreciation Car Insurance isn't just about fixing your car; it's about protecting your money. Without this add-on, you might end up paying the leftover part of the claim, thanks to depreciation deductions. If your car faces significant damage, the repair bill could become a financial burden. With Nil Depreciation Car Insurance, you're in control, preventing unexpected money troubles and keeping your hard-earned cash safe.

• The Add-on Comes at an Affordable Cost

Concerned about the cost? Don't be. While the Zero Depreciation Car Insurance Add-on comes with a bit extra to pay, it's budget-friendly. Compare Nil Depreciation premiums online, pick the plan with the lowest cost, and you're good to go. By adding the Zero Depreciation Car Insurance feature to your Comprehensive Car Insurance, you're ensuring that both your car and your budget stay protected without breaking the bank. It's a wise move that keeps your money safe and your car covered.


Advantage of Zero Depreciation Car Insurance Add-On Cover

Zero Depreciation Car Insurance Add-On Cover offers several advantages that enhance the overall protection of your vehicle. Here are the key benefits of this add-on:

Zero Depreciation Cover:

• An insurer's calculation of claim settlements that factor in depreciation is neutralized when including the add-on.

• This ensures that you receive the full claim amount without deductions for depreciation, leading to higher reimbursement for repairs or replacements.


1. Engine Protection Cover:

• Protects the engine, gearbox, and differential systems from potential harm.

• Protects you from significant repair costs associated with damages to critical components of your vehicle's engine system.


2. Return To Invoice Cover:

• Enables you to avail reimbursement equal to the invoice value in the event of complete loss or theft of the vehicle.

• Ensures that you are reimbursed for the original invoice value of your vehicle, minimizing financial losses in the unfortunate event of theft or total loss.


3. Consumables Cover:

• Covers the cost of consumables (engine oil, nuts, bolts, oil filter, etc.) used during the repair of the insured vehicle.

• Offers additional financial protection by including the expenses of essential consumables necessary for vehicle repairs.


4. NCB Protect Cover:

• Protects your No Claim Bonus (NCB) even if you raise a claim against your car insurance policy.

• Preserve your accumulated NCB, rewarding you with continued discounts on future premiums despite having made a claim.


5. Key Replacement Cover:

• This coverage pays for the expenses incurred in repairing or replacing your keys and lockset if they are lost, damaged, or stolen.

• Mitigates the financial impact of key-related incidents, offering a convenient solution for key replacement expenses.


6. Outstation Emergency Cover:

• Protection is offered for instances where there is damage by accident or system malfunctions that occur beyond the 100 km distance.

• Provides peace of mind and assistance when traveling beyond your usual area of residence.


7. Roadside Assistance Cover:

• 24x7 emergency roadside support is offered in the event of a breakdown, which includes services such as towing and tire repair.

• Offers a reliable support system for unexpected breakdowns, ensuring prompt assistance and reducing the inconvenience caused.


8. PA Cover for Passengers:

• Provides Personal Accident (PA) cover to passengers, including injury/disability or death due to an accident.

• Extends protection to passengers, emphasizing the importance of their safety during travel.


What is Covered in zero depreciation car insurance?

Zero Depreciation Car Insurance, also known as Nil Depreciation Insurance or Bumper-to-Bumper Insurance, provides coverage for the full value of car parts without considering their depreciation. Here's what is typically covered under a Zero Depreciation Car Insurance policy:


• Full Claim Amount: In the event of a claim, the insurance company covers the entire cost of repairing or replacing the damaged parts without factoring in depreciation. This means you receive the full claim amount without deductions for wear and tear.

• Plastic, Fiber, and Rubber Components: Zero Depreciation Car Insurance covers the cost of repair or replacement of parts like plastic, fiber, and rubber components, which are more prone to wear and tear over time

• Metal Parts: It includes coverage for metal parts of the car, such as the engine and gearbox components, ensuring that the policyholder is not financially burdened by the depreciation of these critical elements.

• Paintwork: Damages to the car's paint, which are generally subject to depreciation, are covered without any deduction. This is particularly beneficial for maintaining the aesthetic appeal of the vehicle.

• Glass Parts: Coverage extends to the repair or replacement of glass parts, including the windshield, side windows, and rear windows, without factoring in depreciation.

• Labor Costs: Zero Depreciation Car Insurance often includes coverage for the labor costs associated with repairing or replacing damaged parts. This ensures that the policyholder is not solely responsible for the service charges.


What is not covered in zero depreciation car insurance?

While Zero Depreciation Car Insurance provides comprehensive coverage for various parts of the car without factoring in depreciation, there are certain exclusions that policyholders should be aware of. Here are common items that are typically not covered under a Zero Depreciation Car Insurance policy:

  1. Regular Wear and Tear: Zero Depreciation Car Insurance does not cover the regular wear and tear of parts that occur with normal use over time. It is designed to address sudden and accidental damages.

  2. Mechanical Breakdowns: Damages resulting from mechanical breakdowns, inherent defects, or manufacturing faults are generally not covered. This type of insurance is more focused on covering damages due to accidents.

  3. Consequential Damages: Any damages or losses that are a consequence of the insured event, but are not a direct result of it, may not be covered. For example, if an accident leads to engine damage, subsequent damages caused by the engine failure might not be covered.

  4. Damages Outside Policy Terms: If damages occur while the policy is not in force or if the policy has expired, they will not be covered. It's crucial to renew the policy on time to ensure continuous coverage.

  5. Intentional Damages: Damages caused intentionally or as a result of illegal activities are typically excluded from coverage. The primary purpose of insurance is to protect your livelihood from unanticipated mishaps - it isn't intended to cover intentional deeds.

  6. Non-Accidental Damages: Some policies may exclude coverage for damages that are not a result of accidents, such as damages caused by rodents, rust, or corrosion.

  7. Driving Under the Influence: Damages that occur while the driver is under the influence of alcohol or drugs may not be covered. Driving under the influence is considered a violation of traffic rules and insurance terms.

  8. Unspecified Modifications: Any modifications made to the vehicle that are not declared to the insurance company and approved may result in the denial of a claim. It's important to inform the insurer about any modifications to ensure coverage.


Is Zero Dep Insurance Beneficial for Cars?

Zero Depreciation Car Insurance, also known as "bumper to bumper" or "nil-depreciation" add-on, offers several advantages for car owners. Here are the key benefits:

• Reduced Out-of-Pocket Expenses: One of the primary benefits of Zero Depreciation Car Insurance is its ability to minimize out-of-pocket expenses for car owners. Unlike standard insurance policies that factor in depreciation, this add-on ensures that the policyholder is not burdened with the depreciation cost when repairing or replacing car parts.

• Full Repair or Replacement Coverage: In the event of damage to the insured vehicle, a Zero Depreciation policy compensates the policyholder with the entire repair or replacement amount. This means that the car owner is not subjected to deductions based on the depreciation of car parts, providing comprehensive coverage for the vehicle.

• Financial Loss Protection: The add-on acts as a financial protection for car owners by shielding them from potential losses associated with vehicle repairs. With full repair or replacement coverage, policyholders can have peace of mind knowing that they are protected from significant financial setbacks in the event of an accident or damage.

• Nominal Premium Costs: Despite its extensive coverage, a Zero Depreciation Car Insurance policy is often available at a nominal premium when added to a comprehensive car insurance policy. This affordability makes it a practical choice for car owners seeking enhanced protection without a substantial increase in insurance costs.


Zero Depreciation Car Insurance Vs Comprehensive Coverage

Zero depreciation car insurance and comprehensive car insurance are both types of car insurance that can help protect you financially in the event of an accident. However, there are some key differences between the two types of coverage.



Zero Depreciation

Comprehensive Insurance




Claim Amount

Covers total loss or damage without deducting the depreciation

Depreciation of the car parts is deducted from the IDV at the time of claim settlement

Age of the car

Up to 5 years

Up to 15 years

Own Expense

Less burden on the policyholder at the time of claim

The policyholder has to bear the cost of depreciation sustained by the insured car

Cost of Plastic Parts and Repair

Maximum coverage

Comparatively less


Insurer-Wise Number of Zero Depreciation Claims

The number of zero depreciation claims that a policyholder can raise varies depending on the insurer. Here is a table summarizing the number of zero depreciation claims allowed by some of the top insurers in India:



No. of ZD Claims

No. of non-ZD claims

Bajaj Allianz Car Insurance



Chola MS Car Insurance



Zuno Car Insurance



Future Generali Car Insurance



Go Digit Car Insurance

1 and 2


Kotak Mahindra Car Insurance


No limit to comprehensive plan

Liberty Car Insurance



Magma car insurance



National Car Insurance

Unlimited (in ZD Plus)


New India Car Insurance




Depreciation Rates in Car Insurance

The decline in the worth of a car over some time is expressed as depreciation rates in motor insurance. These figures are essential in determining the insured's affirmed value (IDV) of a vehicle. In the occurrence of the car being involved in a total loss accident or getting stolen, the insurance provider will present compensation not beyond the IDV.

Up to 6 months:

• Depreciation rate: 5%

• Example: If a car part is replaced within the first 6 months, the insurance provider deducts only 5% of the replacement cost.


6 months to 1 year:

• Depreciation rate: 15%

• Example: If a car part is replaced between 6 months and 1 year, the insurance provider deducts 15% of the replacement cost.


1 year to 2 years:

• Depreciation rate: 20%

• Example: If a car part is replaced between 1 year and 2 years, the insurance provider deducts 20% of the replacement cost.


2 years to 3 years:

• Depreciation rate: 30%

• Example: If a car part is replaced between 2 years and 3 years, the insurance provider deducts 30% of the replacement cost.


3 years to 4 years:

• Depreciation rate: 40%

• Example: If a car part is replaced between 3 years and 4 years, the insurance provider deducts 40% of the replacement cost.


4 years to 5 years:

• Depreciation rate: 50%

• Example: If a car part is replaced between 4 years and 5 years, the insurance provider deducts 50% of the replacement cost.


Above 5 years:

• Depreciation rate: Varies based on the insurer's policy.

• Example: If a car part is replaced after 5 years, the depreciation rate may vary, and it's advisable to check with the insurance provider for specific details.


How is Zero Depreciation Car Insurance Premium Determined?

The premium for Zero Depreciation Car Insurance is determined based on various factors that reflect the risk and coverage associated with the insured vehicle. Here are the key considerations in calculating the premium:

  1. Place of Registration: Premium costs are influenced by the location of vehicle registration. Major cities like Delhi, Bangalore, Mumbai, Chennai, Ahmedabad, Kolkata, and Pune often have higher premiums compared to tier-B cities due to increased risks and repair costs.

  2. Sum Insured or Insured’s Declared Value (IDV): IDV is the current market value of the insured car, and the premium is calculated based on this value. The higher the IDV, the higher the premium, as it represents the maximum sum insured after deducting depreciation.

  3. Engine Type: Vehicles with higher cubic capacity or more powerful engines generally have higher premiums. The engine type is a factor in assessing the potential repair costs and risks associated with the vehicle

  4. Installation of Accessories: Premiums for additional accessories and features are calculated separately. Any added features or accessories contribute to the overall value of the vehicle and may impact the premium.

  5. Coverage Type: The type of coverage selected plays a significant role in premium determination. Comprehensive car insurance, which offers broader coverage, tends to have higher premiums compared to basic third-party car insurance.

  6. Vehicle Age: The age of the vehicle is considered in the premium calculation. Newer vehicles may have higher premiums due to their higher market value and potential repair costs.

  7. Fuel Type: The type of fuel used by the vehicle—whether it's diesel, petrol, CNG, or electric—also affects the premium. Different fuel types may have varying risks and repair costs.

  8. Add-On Covers: The inclusion of add-on covers, such as personal belongings cover, zero depreciation cover, roadside assistance, etc., contribute to the premium amount. These add-ons enhance the coverage but also increase the overall premium.


Should I Buy Zero Depreciation Car Insurance?

Opting for Zero Depreciation Car Insurance can be a wise choice in several scenarios, offering enhanced protection and financial benefits. Consider purchasing Zero Depreciation Car Insurance in the following situations:


• New Car Purchase: If you have recently purchased a car or own a relatively new vehicle, Zero Depreciation Car Insurance is particularly beneficial. It ensures that you receive the full claim amount for repairs or replacements without deductions for depreciation, providing comprehensive coverage for your new investment.

• Luxury Car Owners: Owners of luxury cars often face higher repair and replacement costs due to the expensive nature of their vehicle's parts. Zero Depreciation Car Insurance can be advantageous for luxury car owners, offering full coverage for high-value components and minimizing out-of-pocket expenses.

• New Drivers: New drivers may find Zero Depreciation Car Insurance valuable as it provides extra protection against the uncertainties of the road. Inexperienced drivers may be at a higher risk of accidents, and this coverage ensures that repair costs are covered without depreciation deductions.

• Accident-Prone Areas: If you frequently drive in areas with a high incidence of accidents or face challenging road conditions, Zero Depreciation Car Insurance becomes a prudent choice. The increased risk of damages makes this coverage particularly useful in accident-prone regions.

• Expensive Spare Parts: If your car has expensive spare parts, opting for Zero Depreciation Car Insurance is advisable. This coverage prevents significant financial setbacks by covering the entire cost of repairs or replacements, including the expensive components of your vehicle.

• Desire to Reduce Out-of-Pocket Expenses: If you want to minimize out-of-pocket expenses associated with car repairs, Zero Depreciation Car Insurance is an effective solution. This coverage ensures that you are not financially burdened by depreciation costs when making a claim, providing a more cost-effective and comprehensive protection.


How to Buy Zero Depreciation Car Insurance Online from Okbima?

It is very easy to buy Zero Depreciation Car Insurance Online with our user-friendly website Okbima. Here is a step-by-step process of how you can buy it:

Step 1: Visit Okbima's official website.

Step 2: Then click on the "Car Insurance" icon, and fill in the basic details.

Step 3: Compare and choose the different insurance options based on your needs and complete the payment process.

Step 4: Once payment is completed, car insurance details will be sent to your registered email ID.


Claim Settlement with Zero Depreciation Car Insurance

During claim settlement with Zero Depreciation Car Insurance, the process differs significantly from standard car insurance plans. Here's how the claim settlement works with Zero Depreciation coverage:

  1. Depreciation Applicable in Policy Wording: The policy wording outlines the depreciation rates applicable to various car parts. For instance, there might be a 50% depreciation on nylon, plastic, and rubber parts (including batteries), 30% on fiberglass components, and 5-10% on wooden parts.

  2. Zero Depreciation Benefit: When you have a Zero Depreciation Car Insurance policy, you are not required to pay any depreciation amount to the insurer at the time of a claim. This means that you receive the full claim amount without any deductions for the depreciation sustained by your car parts.

  3. Full Claim Amount: Unlike standard car insurance plans where the insurer deducts the depreciation value of replaced parts from the claim amount, Zero Depreciation Car Insurance ensures that you receive the entire claim amount. The policy nullifies the depreciation costs during claim settlements.

  4. Comparison with Standard Insurance: In standard car insurance plans without a zero depreciation cover, the insurer typically reimburses the loss after deducting the depreciation value of the replaced parts. This deduction can significantly reduce the amount received by the policyholder for repairs or replacements.

  5. Financial Advantage: The key advantage of Zero Depreciation Car Insurance is that it minimizes out-of-pocket expenses for the policyholder. By eliminating depreciation deductions, this coverage ensures a more cost-effective and comprehensive solution for repair or replacement costs.


How to Renew Zero Dep Car Insurance Online?

Renewing your Zero Depreciation Car Insurance online is a straightforward process. Here's a step-by-step guide:

Step 1: Stay informed about the renewal date and access the renewal platform.

Step 2: Select your purchased policy, click on the policy renewal option, and fill in the required policy details

Step 3: Submit the form, and complete the payment process. 

Step 4: Once payment is completed, the insurer will send an acknowledgment of the zero depreciation car insurance renewal to your registered email ID.



In conclusion, buying Zero Depreciation Car Insurance offers a wise financial strategy for vehicle owners. This coverage ensures that policyholders receive the full claim amount without deductions for depreciation, providing comprehensive protection against repair or replacement costs.

Particularly beneficial for new cars, luxury vehicles, and high-risk areas, Nil Depreciation Insurance minimizes out-of-pocket expenses and simplifies the claim settlement process. While the premium may be slightly higher, the long-term financial advantages and peace of mind make it a valuable investment.



Why should I buy zero-depreciation car insurance?

Zero-depreciation insurance ensures full coverage for car repairs without factoring in depreciation, minimizing out-of-pocket expenses after an accident.


Do I get a No-Claim Bonus in a zero-dep car insurance policy?

Yes, you can still avail No Claim Bonus (NCB) with zero-depreciation car insurance if you don't make any claims during the policy period.


What is the Insured Declared Value in a nil depreciation car insurance policy?

Insured Declared Value (IDV) is the maximum amount payable by the insurer in case of total loss or theft, calculated without considering depreciation in a zero-depreciation policy.


When can I buy Zero-depreciation insurance for my car?

You can purchase zero-depreciation insurance when renewing your car insurance policy, typically during the policy renewal period.


On what factors does my zero-depreciation car insurance policy depend?

Factors like the car's make, model, age, and the chosen insurance provider influence the cost and coverage of zero-depreciation car insurance.


How do I know if my car insurance is zero dep?

Check your policy documents or contact your insurance provider. Zero-depreciation policies explicitly mention full coverage without factoring in depreciation.


Can third-party car insurance be converted to zero depreciation?

No, you need to opt for a comprehensive insurance policy with zero-depreciation coverage as third-party insurance does not include this feature.


Is taking zero depreciation car insurance after 5 years good?

Yes, opting for zero-depreciation insurance after 5 years is beneficial as it provides comprehensive coverage, especially when the car's depreciation is significant.


Who is eligible for zero DEP insurance?

Any car owner can opt for zero-depreciation insurance, but eligibility depends on the car's age and the insurer's terms and conditions.


Is zero depreciation the same as bumper-to-bumper?

Yes, zero depreciation is often referred to as bumper-to-bumper insurance, offering comprehensive coverage without factoring in depreciation during claims.


Does zero DEP cover tires?

In most cases, zero-depreciation insurance does cover the cost of replacing damaged tires, providing comprehensive protection for various car parts.


What is the use of zero depreciation car insurance?

Zero-depreciation car insurance ensures full coverage without considering depreciation during claims, minimizing out-of-pocket expenses for car repairs after an accident.


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