What Is Zero Depreciation Car Insurance?
Zero depreciation (also called zero dep, nil depreciation or bumper-to-bumper) is an add-on to your comprehensive car insurance policy. Under standard comprehensive insurance, when you claim for accident damage, the insurer deducts depreciation on the replaced parts — you pay the depreciation out of pocket. Zero dep eliminates this deduction, paying you the full replacement cost of all damaged parts.
How Depreciation Affects Standard Claims
Standard IRDAI depreciation schedule for car parts:
- Rubber, nylon, plastic parts, tyres and tubes: 50%
- Fibreglass components: 30%
- All other parts (metal): Age-based (5–40%)
For a 3-year-old car with ₹80,000 in repair damage (including ₹40,000 of plastic and rubber), you would pay approximately ₹20,000 out of pocket for depreciation. With zero dep, you pay nothing beyond your deductible.
Real Example: Claims With and Without Zero Dep
| Component | Cost | Without Zero Dep | With Zero Dep |
|---|---|---|---|
| Bumper (plastic) | ₹18,000 | ₹9,000 (50% dep) | ₹18,000 |
| Headlight (plastic) | ₹12,000 | ₹6,000 (50% dep) | ₹12,000 |
| Door panel (metal) | ₹25,000 | ₹20,000 (20% dep) | ₹25,000 |
| Labour | ₹8,000 | ₹8,000 | ₹8,000 |
| Total bill | ₹63,000 | You pay ₹20,000 dep + deductible | You pay only deductible |
What Zero Dep Covers and Excludes
Covers: All standard accident damages — dents, scratches, broken glass, plastic parts, rubber components, body panels
Excludes: Mechanical/electrical breakdown, engine damage from oil leak/water ingress (needs engine protect add-on separately), tyres (separate tyre protect add-on available), consumables like engine oil and nuts/bolts (separate consumables cover)
How Much Does Zero Dep Cost?
Zero dep add-on premium depends on the car's age, make and IDV:
- New car (Year 1): Approximately ₹2,000–₹6,000 per year
- Year 2–3: ₹3,000–₹8,000 per year
- Year 4–5: ₹5,000–₹12,000 per year
Given that a single mid-sized accident can result in ₹20,000–₹40,000 of depreciation savings, the add-on pays for itself after one significant claim.
Who Should Buy Zero Dep?
Definitely buy if:
- Your car is less than 5 years old
- You drive frequently in urban traffic (higher accident probability)
- You drive an expensive or imported car with costly parts
- You are a first-time driver or have new young drivers at home
Consider skipping if:
- Your car is over 7 years old (older cars have lower replacement part value)
- You drive very infrequently
- Your car is significantly depreciated and has low IDV
Claim Limits Under Zero Dep
Most insurers allow 2–3 zero dep claims per policy year. After exhausting the zero dep claim limit, further claims in the same year are settled under standard depreciation terms. Check your policy for the exact claim count limit.
Zero Dep vs Consumables Cover
Zero dep covers the depreciation on parts but not consumables (engine oil, coolant, brake fluid, nuts, bolts). A separate consumables add-on covers these items. For comprehensive coverage, buy both zero dep and consumables add-ons — combined premium is still typically under ₹2,500–₹4,000/year for most cars.