Zero Depreciation Car Insurance

Zero depreciation cover is also known as bumper-to-bumper or nil depreciation cover. With zero depreciation car insurance, the policyholder does not have to pay the depreciation value of the damaged or replaced parts of the car and can claim the full amount under their comprehensive car insurance.

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What is Zero Depreciation in Car Insurance?

A zero dep is an add-on cover under which the insurance company does not charge the depreciation sustained by the insured car. Under a nil depreciation add-on in car insurance, a policyholder can claim the total cost of repair or replacement of car parts including their depreciated value in case of accidental damage.

In simple words, zero depreciation car insurance means that the depreciation value of the damaged parts won't be deducted from the claim amount and you will receive full compensation. Thus, helping you save a huge amount. Moreover, this cover applies to vehicles that are up to 10 years old and the policyholder can avail of it twice during the policy tenure. The number of claims a policyholder can raise under a zero dep car insurance depends on the particular insurer.

Should You Opt for Zero Depreciation Car Insurance Cover?

If you have recently purchased a car or have a relatively new car then it makes sense to opt for zero dep car insurance. Here are some reasons to get a zero depreciation addon with your car insurance policy:

• Owner of luxury cars: The value of a car starts depreciating as soon as it's taken out of the showroom. So it definitely makes sense to opt for zero depreciation cover for your new and luxurious car.
• New drivers: If you are a new driver then there are more chances of accidents leading to out of pocket expenses for repair or replacement of car parts. To get compensated for the full repair amount in such situations, you can opt for a zero depreciation car insurance policy.
• Driving in accident-prone areas: Driving in an accident prone area can again lead to more repair expenses. If you don't have a zero dep cover in such situations, you may have to shell out a lot of money from your pocket. Therefore, it's always a good idea to invest in a zero depreciation car insurance.
• If your car spare parts are expensive: There are many cars whose spare parts are expensive leading to high depreciation value as well. Thus, if you don't want to pay for this depreciation, make sure to purchase a nil depreciation cover with your car policy.

Is Zero Depreciation Insurance Beneficial for Cars?

The benefits of bumper to bumper add-on for car owners are as follows:

• This cover helps in reducing out-of-pocket expenses to almost zero without deducting the depreciation on the parts of the car, which is why it is called a nil-depreciation policy.
• It protects from financial loss and compensates the full repair or replacement amount to the policyholder.
• This add-on is available at a nominal premium under a comprehensive car insurance policy.

Zero Depreciation Car Insurance Vs Comprehensive Coverage

Below is a table stating the basic differences between a car insurance policy with zero depreciation add-on and a basic comprehensive car insurance policy -

How is Zero Depreciation Car Insurance Premium Determined?

Factors that are taken into consideration while calculating zero dep car insurance premium are:-

• Place of Registration - The cost of the premium is higher in all the major cities like Delhi, Bangalore, Mumbai, Chennai, Ahmedabad, Kolkata and Pune as compared to other tier B cities.
• Sum Insured or Insured's Declared Value (IDV) - It is the current market value of the insured car from which the depreciation is deducted while calculating the premium.
• Engine Type - The premium of vehicles with higher cubic capacity is comparatively higher than those with an engine having lower cubic capacity.
• Installation of Accessories - Premium for car accessories and additional features is calculated separately.
• Coverage Type - The rate of premium also depends on the type of coverage you opt. Comprehensive car insurance is likely to have higher premiums than third-party car insurance.
• Age - Vehicle age is also taken into consideration while calculating the premium of a zero-depth car insurance.
• Fuel Type - Whether it is a diesel, petrol, CNG, or electric car, the fuel type is an important factor in deciding the zero depreciation car insurance premium
• Add-on Covers - Add-ons like the personal belongings cover, zero depreciation cover, roadside assistance etc. also decide the premium of a car policy.

Insurer-Wise Number of Zero Depreciation Claims

Below we have mentioned the number of zero dep and non zero-dep claims that a policyholder can raise based on different insurers:

Disclaimer: This information provided by the Insurer. The table mentioned above is according to the alphabetical order of the insurance company. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in

Depreciation Rates as per the IRDAI

Insured Declared Value (IDV) is the current market value of the car. It is largely affected by the depreciation sustained by the insured car. It is the maximum sum insured that the insurance provider pays after deducting the depreciation cost of the car. The IDV is offered in case of a total loss of the car or theft.

Insured Declared Value = (The listing price of the manufacturers - Depreciation) + (Accessories excluded from the listed price - Depreciation)

DepreciationRates that are applicable on replaced parts if you don't have a zero dep cover are -

• No deductions on parts made of glass
• 30% deduction on fiberglass components
• 50% deduction on parts made of rubber, nylon, or plastic like airbags, tires, tubes, and batteries

As soon as you take your car out of the showroom, its value depreciates by 5%. This depreciation keeps on increasing year after year. Apart from the parts mentioned above, the depreciation on other parts of the car is as follows:

If you do not buy zero dep cover then this deprecation value will be deducted from the compensation amount.

How to Get Zero Depreciation Car Insurance Online?

Buying zero depreciation insurance online is a simple process as compared to purchasing it offline. Here's a quick rundown of the online process-

• Visit the Car Insurance page from the homepage of Policybazaar.com
• Enter your car number on the given form
• Select details like car model, make fuel type, variant, RTO and registration year
• Now from the given car insurance plans, select the plans that suit you
• To add zero depreciation cover to your policy, select ‘Zero Depreciation' from the Addons and Accessories dropdown
• Once you have selected the add-on, your car insurance premium will increase
• Pay the final premium amount via desired payment mode
• Once you have paid the premium, your zero dep car insurance policy documents will be mailed to you.

Tips toRenew Zero Dep Car Insurance Online

Car insurance renewal with a zero dep cover is a simple and hassle-free process, especially if it is done online. Here are some tips to renew zero dep car insurance online: e -

• Keep a track of the renewal date - The insurer or the policy aggregator usually sends a reminder over a call or email. It is recommended for the policyholder to keep a record of the same so that the policy is renewed before the due date.
• Enter the required policy details - While renewing zero depreciation car insurance online, there is no need of running from pillar to post for any paperwork, cheque submission, etc. It can be done online on Policybazaar.com by clicking on the policy renewal option. One just needs to choose the existing or new customer option, to begin the process.
• Follow the instructions - Submit all the required details, fill out the form and click on the payment option
• Make the payment online - Payment to the insurance company can be done online using a debit or credit card.
• Renewal - The insurer will send an acknowledgement of the zero depreciation car insurance renewal on your registered email id and phone number.

Claim Settlement with Zero-Depreciation Car Insurance

At the time of claim settlement, the depreciation applicable to your car parts is mentioned in the policy wording. As mentioned above if you don't have a zero dep addon, you need to pay 50% depreciation on nylon, plastic, and rubber parts including batteries, 30% on fiberglass components, and 5-10% on wooden parts.

However, if you already have zero depreciation car insurance, you are not required to pay anything to the insurer. As a result, you will receive the full claim amount without deducting the depreciation sustained by your car.

In the case of standard car insurance plans without a zero dep cover, the insurer only reimburses the loss after deduction of the depreciation value of the replaced parts, unlike a nil depreciation car insurance policy.

Now that you are aware of the benefits of zero-dep car insurance, you can buy it as an add-on, so why not go ahead and buy it?

Why buy Zero Dep Car Insurance from Policybazaar Insurance Brokers Private Limited?

Here are some reasons to buy nil depreciation cover from Policybazaar.com:

• 24x7 Claims Assistance: Our claims experts are now available 24x7 to help you with claim intimation and status updates.
• Cashless Assurance: Call us or the insurer and you will get a "Delivery Order" for a cashless facility for repairs at any garage across India. In the rare cases of cashless not being provided to you, the claim reimbursement will be paid within 24/48 working hours post submitting documents/original invoice as mentioned against the respective Insurer.
• 3-Day Repair Assurance: Your car will be repaired at a trusted garage and will be delivered back to you within 3 working days.
• Free Pickup & Drop: Call us when you need a claim and a garage partner will pick up and drop your car.
• Self Video Claims: We have made the claims process smoother. Simply upload a video of your damage through our claims app and we will take care of the rest.
• Windshield Claims At Home: Call us when you have a windshield replacement claim and the garage partner will replace the windshield at your home itself.