All You Need To Know About Claiming Zero Depreciation Car Insurance Policy

The process of filing a claim for a zero depreciation car insurance policy is mentioned below. Along with the rate of depreciation for different car parts and the benefits of choosing zero dep insurance in the first place. Here is all that you need to know about zero depreciation insurance policy for car.

Maintenance of a car is a significant part of owning it, right from following its maintenance schedule to driving it a bit regularly to keeping the tyre pressure in check. To keep your car looking better and functioning better, cleaning its interiors and exteriors is also important. Also, it is imperative to buy a car insurance policy.

A car insurance policy has the capability of protecting your car against a lot of unforeseen events. And if you want to get maximum protection for your car, zero depreciation in car is the ideal insurance for it. Here is all that you need to know about it and how to file a claim.

What Is Zero Depreciation Insurance?

Zero depreciation at times is also known as nil depreciation, or zero dep is an add-on to a car insurance policy. The add-on is available for a comprehensive plan as well as a stand-alone own-damage policy for a car. In a nutshell, it ensures that you receive the entire compensation during a claim, without any deductions for depreciation. 

When you own a car, depreciation is one aspect that comes along. As the car gets older, its value depreciates. This impacts a couple of things. For starters, when you resell your car, it is mostly at a price lower than what you had bought. It is majorly attributed to depreciation which is the loss in value due to wear and tear due to regular usage. Secondly, during claims also, depreciation eats into the claim amount. 

As you file for a claim, insurance companies will deduct the depreciation amount from replacement parts and repairs. As a result, you will end up paying the depreciation amount from your pockets. This can be avoided if you have zero depreciation insurance. 

Zero depreciation insurance makes sure that insurance providers consider the actual cost of replacement and repairs. And not the depreciated cost. And this can result in a lot of savings during claims. Even though you end up paying a small premium for the add-on, its benefits are far greater. During claims, you will never have to pay for depreciation, which will easily surpass the premium of the add-on. 

Here Is A Simple Example To Illustrate The Zero Depreciation Insurance.

The bumper of your car is damaged in an accident, and the cost of repair is Rs. 6000. Since it is a plastic part, it depreciates at 50%, meaning the insurance provider will cover only Rs. 3000. Out of that, you will end up paying a deductible of Rs. 1000 for the claim. Thus, the out-of-pocket expenses will be Rs. 4000.

However, with Zero Depreciation Insurance in car, you will only need to pay the deductible of Rs. 1000, and the remaining Rs. 5000 will be paid by the insurance provider. The 50% depreciation on plastic parts will not be applicable anymore. 

How To File A Claim For Zero Depreciation Car Insurance?

The actual claims steps might differ slightly based on the insurance provider that you opt for. However, below are some of the standard steps of filing for a zero-depreciation claim.

  1. Visit the app or website of your insurance provider to file a claim.
  2. You can also call customer care to file a claim if you are away from a computer or smartphone.
  3. Once you provide some basic details, such as the date and time of the incident, along with documents such as your driving license, registration certificate, and any pictures or video of the incident, the claim will be filed.
  4. You must then take the car to a network garage or the authorized dealer of the car.
  5. An independent surveyor will visit the garage and inspect your car.
  6. Once the surveyor provides their report, the repair work will begin. 
  7. After the repair work is complete, you will need to pay the mandatory deductible and receive your car.
  8. This completes the claim process.

It is always a good idea to file an FIR for any accidents involving your car. It will give you the much-needed proof of the incident and is needed in some cases by the insurance providers. Also, during the entire claim process, your insurance provider might ask for other supporting documents. 

How Is Depreciation Calculated For A Car?

The IRDAI, or the insurance regulatory and development authority of India, decides on the rate of depreciation for all vehicles. This ensures that a standard rate is followed. Here is how depreciation can impact your car insurance policy.

Car’s AgeRate of Depreciation (%)
Up to 6 months5
Between 6 months and 1 year15
Between 1 year and 2 years20
Between 2 years and 3 years30
Between 3 years and 4 years40
Between 4 years and 5 years50
Above 5 yearsMutually decided between the insurer and policyholder.

Car parts that are nylon, rubber, batteries, and plastic depreciate at 50%, whereas fibre parts depreciate at 30%. For all wooden parts, the rate of depreciation is 5% for the first year and 10% for the second year, and so on. 

Also Read: Top 5 Best Upcoming Electric Cars In India

Top 4 Benefits Of Choosing Zero Depreciation Cover For Car

When you buy a zero depreciation car insurance policy, the following are the benefits that you can avail of. 

1] Better claims

Zero depreciation cover ensures that you receive higher payouts on your claims. As we have already seen in the example above, a claim without zero depreciation cover will result in a lower claim amount. In comparison, a zero depreciation cover enables higher payouts.

2] More savings

A zero depreciation add-on makes sure that you save a considerable amount of money on insurance claims. Since you no longer have to worry about depreciation rate, it all translates to better savings. As we have seen from the example above, a zero depreciation plan ensures there is minimal out-of-pocket payment for you during claims. The only thing that you will need to pay during a claim is the mandatory deductible. 

3] Better coverage

The add-on ensures that you have all the coverage benefits of a comprehensive plan and offers protection against depreciation. Thereby ensuring that your car has access to much better coverage. 

Read More: Top 6 Upcoming Cars in India Price, Launch & Quick Specifications

4] Affordability

Though the add-on comes at a small premium, it offers much better value for money in the long run. The benefits that you receive through the absence of depreciation make the add-on affordable.

A zero-depreciation car insurance policy is ideal for someone who has just bought a brand-new car or a luxury car. The cost of repair for any damages on a new car or a luxury car will be higher than on an old car or a standard car. The add-on will ensure that the new car or luxury car, or even sports car has the best coverage possible.


Though it is mandatory to buy a car insurance policy, choosing the right one can benefit you in several ways. Buying a zero-depreciation car insurance policy is one such example. If you already have Zero Depreciation Insurance for your car and are wondering how to file a claim, the above steps will help you in the process.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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