Comprehensive vs Zero Depreciation Car Insurance: Coverage, Calculator & Claim Process


5 min read

The zero depreciation car insurance cover is a very handy cover to have in motor insurance. It protects you from the IDV of the vehicle at the time of a claim. How does the zero dep cover help and how can you attach the zero depreciation rider to your plan. Read on to get all the answers.

What does Zero Depreciation Mean?

What exactly is zero depreciation meaning? To put it in simple terms, zero dep insurance protects your vehicle from the financial losses incurred due to ageing. With age, the value of the car falls. As a result, the IDV (current market value) also begins to depreciate. When you make a car insurance claim, the IDV is calculated and the claim amount is paid out accordingly. This leads to you receiving a lower claim amount. To work around this problem you need to invest in a zero depreciation cover.

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What is Zero Dep/Zero Depreciation Car Insurance?

Now that you know what is zero depreciation car insurance, you should try to get this cover. You can also use the zero depreciation car insurance calculator for better understanding. But before doing so, keep the following points in mind:

1. Available as rider

The zero dep cover is commonly available as a rider with comprehensive motor insurance plans. Most people who opt for this cover buy the rider. Explore the options that are available, compare the policies and find your ideal with which you can keep your vehicle protected in the best way.

2. Not available for old cars

There is one very important clause associated with zero dep insurance that you should know. The zero depreciation cover cannot be applied to a vehicle that is older than five years. You can only opt for this cover if your car is aged five or fewer years. Also, the car is best suited for new and expensive cars that may need repairs to its expensive parts.

Some companies do provide Zero Dep cover for older cars, i.e. more than 5 years as well, but the options are limited and expensive. So, choose wisely.

What is zero dep or nil dep in motor insurance?

3. Not a compulsory cover

Zero depreciation is not a compulsory car insurance cover. It is an add-on or extra cover that you can opt to buy. You won’t be legally held responsible if you are found driving your car without this cover.

Once you are aware of these factors, you will be able to understand what is zero dep car insurance is. Then, compare car insurance plans, find the most suitable cover, attach the zero depreciation cover and make the plan custom-made as per your requirements.

Car Depreciation Rates in India

Age of the car % of depreciation
Cars less than 6 months NIL
Cars more than 6 months old but < 1 year 5%
Cars more than 1-year-old but < 2 years 10%
Cars more than 2 years old but < 3 years 15%
Cars more than 3 years old but < 4 years 25%
Cars more than 4 years old but < 5 years 35%
Cars more than 5 years old but < 10 years 45%
Cars more than 10 years 50%

The components of the car also reduce in value over time:

Car Components % of depreciation
Tyre, rubber parts, battery, nylon, tubes and plastic parts 50%
Glass and fibre materials 30%
All other parts made of glass NIL

Who should Buy Zero Depreciation Car Insurance Cover?

So, wondering who should opt for Zero Dep Car insurance, here is the list:

  1. Someone who is buying a brand new car or a pre-owned car that is less than 5 years old
  2. If the car in question is a luxury/ highly expensive car
  3. If the car is being used quite often
  4. In case the driver is a learner and thus more prone to accidents

How to calculate zero dep Insurance Premium?

In order to calculate your zero dep car insurance premium, you can visit the PayBima Motor Insurance portal and use the zero dep car insurance premium calculator. Follow the steps to calculate the premium:

  1. Enter the registration number of your vehicle, your mobile number and your email id
  2. On the next page fill in details about the previous policy/ claims made etc, then click “Get Quote”
  3. You can browse through the plans and compare the different car insurance plans available
  4. You will be able to see the charges for the zero depreciation cover that is to be paid

Difference Between Comprehensive Insurance vs Zero Depreciation Car Insurance

Let us take a look at this table to help understand the differences between Zero Depreciation Cover and Comprehensive Cover:

Details  Basic Comprehensive Policy Zero Depreciation 
Nature It is a standalone car insurance policy This is an add-on cover that is attached to the base policy
Premium  Premium is more than third-party insurance but less as compared to Zero Dep The premium increases by about 15% to 20%
Repair Cost You need to make part payment when you make a claim A much bigger share is paid by your insurer
Claim settlement  Made after deducting the depreciation value Car depreciation rates are not applicable
Number of Claims You can make any number of claims, however, you will lose out on your NCB Under the Zero-Dep cover, you can make up to 2 claims in a policy year
Vehicle’s Age Can be purchased for all vehicles Comes with the restriction of 5 years

Difference Between Third-party Car Insurance vs Zero Depreciation Cover

Details  Third-Party Car Insurance Policy Zero Depreciation 
Nature It is a mandatory car insurance coverage Zero Dep is an optional add-on cover that can be attached to the base policy
Premium  The premium charges are nominal and less than comprehensive policy The premium increases by about 15% to 20% of the regular policy
Coverage  Only third-party liabilities are covered Depreciation charges are not payable by the vehicle owner
Number of Claims Any number of claims may be made You can make up to 2 claims in a policy year
Vehicle’s Age Has to be purchased for all vehicles Mostly comes with the restriction of 5 years

Car Depreciation Rates With and Without Zero Depreciation Cover

Age of the Vehicle Rate of Vehicle Depreciation without the Zer Dep Cover Rate of Vehicle Depreciation with the Zer Dep Cover
Within 6 months 5% Nil
6 months – 1 year 15% Nil
1 year – 2 years 20% Nil
2 years – 3 years 30% Nil
3 years – 4 years 40% Nil
4 years – 5 years 50% Nil


It is very easy to find a good motor insurance plan these days. The plans are very comprehensive in nature, but there are certain drawbacks such as the calculation of the IDV by using the zero dep car insurance premium calculator. However, such problems can easily be tackled with the help of handy car insurance riders such as the zero depreciation rider. Add this to your comprehensive plan, or buy zero dep car insurance plan and keep your vehicle protected in the most wholesome way possible.

Also read: Difference Between Own Damage and Third Party Car Insurance Policy

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

FAQs on Zero Depreciation Car Insurance

How does zero dep insurance add value to my standard insurance policy?

Your standard car insurance policy will only cover the damages to your vehicle in case of an accident, however, the repair or replacement which is caused due to depreciation will not be covered and will be paid out of your pocket. But with zero dep you, the insurer pays the entire amount of the car insurance claim without considering the effect of depreciation.

What is the best zero depreciation car insurance in India?

When you visit, you are given a lot of options to choose from. You can browse through different plans offered by different car insurer companies and select the one that offers the best coverage at the most well-suited price. 

What Factors Affect the Zero Depreciation Car Insurance Premium?

Following factors affect the zero dep: 

Age of the car
MMV- make, model and variant
Registration City
The Car Insurance company

What is the pricing of zero depreciation car Insurance?

On average, a Zero Depreciation car insurance policy would cost you about 15% to 20% more than a basic comprehensive car insurance policy. 

What is the difference between own damage and zero depreciation?

Own damage is a standalone policy that can be purchased if you already have a third-party liability insurance policy. It covers the damage your vehicle may suffer in an accident. Zero Depreciation, on the other hand, is an add-on that can be added over and above the OD cover or comprehensive insurance.

Is comprehensive or zero dep better?

If you have a car or have recently purchased one which is less than 5 years old, it is recommended that you go for the zero dep add-on, as in the long run, you will save on the vehicle depreciation cost. In case your vehicle is more than 5 years old, a comprehensive insurance plan should be good enough. Weigh the pros and cons of each and then decide. 

Jul 01, 2021
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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