Bought a New Car? Here’s Why Skipping Zero Dep Insurance Could Cost You Big

Buying a new car is an exciting milestone. But with that new car comes the responsibility of protecting it. Most new car owners understand the need for a car insurance policy.

Still, many overlook one vital add-on that can save them a lot of money: zero-depreciation car insurance. Missing out on this single cover could end up costing you far more in the long run.

Let’s understand why.

What Is Zero-Depreciation Car Insurance

When you buy a car insurance policy, it usually covers damage to your vehicle in case of an accident. But there’s a catch: the insurer deducts depreciation before paying the claim. Depreciation is the reduction in your car’s value over time due to wear and tear.

So, if your bumper, door, or windshield needs replacement after an accident, the insurer pays only a part of the cost. The depreciation amount comes from your pocket.

This is where zero depreciation car insurance makes all the difference. Also known as a zero-depreciation cover, it ensures you get full claim reimbursement without any deduction for depreciation. That means your insurer covers the entire repair or replacement cost of damaged parts, not just their reduced value.

In simple words, with a zero-depreciation car insurance policy, your new car remains financially protected as if it were brand new, even years down the line.

Benefits of Zero Depreciation in Car Insurance

A zero-depreciation cover may come with a slightly higher premium, but the benefits easily outweigh the cost, especially for new or high-value cars.

Let’s look at why this cover is a must-have.

Higher Claim Amounts

The biggest advantage is that you receive the full claim amount without deductions. Whether it’s plastic, fibre, or metal parts, the insurer covers the entire cost of replacement. This ensures your car gets repaired with genuine parts, and you don’t have to compromise on quality due to high expenses.

Maximum Protection for New Cars

For the first few years, your car’s parts depreciate the fastest. A zero-depreciation car insurance policy protects you from that loss, giving you near-total coverage during the years when your car’s value drops the most.

Reduced Out-of-Pocket Expenses

Without zero dep, you might end up paying thousands from your own savings after every minor or major accident. A zero-depreciation cover eliminates that stress. You pay nothing except the compulsory deductible mentioned in your policy.

Better Resale Value Maintenance

When your car is repaired using genuine manufacturer parts instead of cheaper alternatives, it helps maintain its original condition and resale value. Having a zero-depreciation car insurance policy indirectly keeps your car’s market price stronger for longer.

Peace of Mind

Accidents are stressful enough. With a car insurance policy that includes zero depreciation cover, you can focus on safety and repair quality rather than worrying about hidden costs or reduced claim settlements.

Standard Depreciation Rates for Vehicles

To truly appreciate the value of zero depreciation car insurance, you should understand how much depreciation can affect your claims.

Insurance companies use standard depreciation rates set by regulatory guidelines. Here’s a quick look at typical depreciation values for car parts and vehicles:

Depreciation Based on Vehicle Age

Now imagine this in real terms. Suppose your one-year-old car’s front bumper costs ₹25,000 to replace. With standard car insurance, the insurer will deduct 50% depreciation on plastic parts. That means you get only ₹12,500 as a claim. The rest comes from your pocket. But with zero depreciation cover, you’d get the full ₹25,000 reimbursed.

Now, that’s a big difference for a small premium increase.

Inclusions and Exclusions

While zero depreciation car insurance is one of the best add-ons you can buy, it’s important to know what it covers and what it doesn’t.

What’s Included

• Full coverage for replaced parts: No depreciation deduction on metal, plastic, or rubber parts.
• Repair and replacement at authorised workshops: Ensures genuine parts are used during repairs.
• Coverage for total loss or theft: In some cases, depending on the policy.
• Multiple claims: You can make more than one claim during the policy period (subject to limits set by your insurer).

What’s Not Included

• Regular wear and tear: Routine maintenance and ageing aren’t covered.
• Mechanical breakdowns: Failures unrelated to accidents are excluded.
• Older vehicles: Usually, cars older than five years aren’t eligible for a zero-depreciation cover.
• Uninsured accessories: If your added accessories aren’t part of the declared value, they won’t be covered.

When buying car insurance online, it’s easy to check these inclusions and exclusions on the insurer’s website. Always read the policy terms before finalising your plan.

Why It’s Worth the Extra Rupee

Many car owners, especially first-time buyers, hesitate to add a zero-depreciation cover because it slightly raises the premium. But here’s the truth: the extra cost is minimal compared to the potential savings during a claim.

A single repair after an accident can easily run into tens of thousands of rupees. With a regular policy, you’ll have to bear a big chunk of that due to depreciation deductions. But with zero depreciation car insurance, you get complete protection, full reimbursement, and absolute peace of mind.

When you buy car insurance online, you can instantly compare plans with and without zero depreciation. The difference in premium will likely be small, but the difference in benefits can be massive.