Please wait... We are calculating your premium.

Zero Depreciation Cover

Depreciation Cover

Every year value of your car depreciates (value reduces with time). So at the time of claim, you only get the reduced value of the car. At the time of a settlement, the claim amount is reduced due to depreciation. This results in a great reduction of the claim, which eventually has to be paid from your pocket despite the insurance. Depreciation cover helps avoid this. With this add-on cover, you get the full amount without factoring the depreciation amount.

Car Insurance is a statutory requirement today. Plying a car without proper Car Insurance invites punishments as it is an offence according to Motor Vehicle Act. And with the right level and right kind of insurance Cover it provides financial compensation for unforeseen mishaps related to your vehicle. The coverage provided is valid for accidents or vehicle theft, natural disasters, man-made disasters and for various other issues such as breakdowns, depreciation and more. Based on your requirement, you can select Add-On covers to protect your vehicle with; one of them being the Zero Depreciation Cover.

What is a Zero Depreciation Cover for Car Insurance?

When it comes to Car Insurance, people usually prefer to take the Comprehensive Insurance Plan which covers the vehicle, the owner and any Third-Parties. To protect the value of your car which depreciates over time, you will need to have a Zero Depreciation Cover. This protects you from incurring additional financial expenses because of depreciation. It enables you to claim without deducting any depreciation on certain materials. In case of an accident, the complete cost will be covered by the insurance company without considering the depreciation cost of parts. You get the maximum reimbursement for your claims. To put it simply, Zero Depreciation Cover offers complete Coverage without factoring in depreciation.

How Depreciation Works in Standard Car Insurance Cover?

If you check out the comprehensive plan of a standard Car Insurance

, you will know there is a huge amount of depreciation that is deducted at the time of claim.

The Insurance Regulatory and Development Authority of India (IRDA) has established the following systems for calculating the depreciation value:

  • On nylon, rubber, and batteries- 50% depreciation shall be deducted
  • On wooden parts- depreciation shall be deducted depending upon the age of the car (like 5% in the first year, 10% in the next and so on),
  • On fiber glass components- 30% depreciation shall be deducted.

The duration on how the depreciation value is calculated is listed below:

  • 0% for the first six months
  • 5% for the first year (over 6 months to 1 year)
  • 10% for the second year and so on

When you make a claim with the general car insurance policy, the insurance company reimburses according to depreciated vale of the car parts considering the above points. This is irrespective of the actual cost. If you have a new car, even a small damage can turn out to be expensive. A Zero Depreciation Cover will prove to be financially prudent in the long run.

Benefits of Zero Depreciation Cover Over Standard Cover?

A standard insurance Cover plan does not provide Zero Depreciation. Whereas the Zero Depreciation Cover delivers full settlement Coverage. Here, depreciation won’t play any role however old your car may be. It just costs 15-20% of the standard Cover.

The difference between the two across various parameters is detailed below:




Claim Settlement

Offers settlement Coverage without accounting for depreciation.

Claim amount is based on the current value of the vehicle, considering the depreciation.

Insurance Premium



Cost of Plastic Fiber and repairing

Insurer bears the maximal amount

Policy Holder should pay more from his/her pocket

Age of the Car

Usually Covers New Cars up to 5 years.

Can be availed for a car which is more than 3 years old.


What Factors Affect the Zero Depreciation Premiums?

  • Age of the car
  • Model of the car
  • Location from which you are registering your policy

Why Opt for Bharti AXA Zero Depreciation Cover?

  • Beneficial for cars less than 5 years old
  • 100% claim on depreciated parts during settlement
  • Valid for 2 claims during the policy period
  • Repair cost of durable parts like airbags, batteries, tyres, nylon is covered.

Many believe Zero Depreciation Cover is more for new drivers. However, even the best trained and experienced drivers can face an unforeseen event. Hence, Zero Depreciation Cover as Add-On Cover with your standard Car Insurance Plan is recommended for all car owners with cars less than 5 years old.

Key Features of a Zero Depreciation Cover:

  • Beneficial for a vehicle less than 5 years old.
  • 100% repayment on depreciated parts during settlement.
  • Repair costs of durables like tyres, batteries, airbags, nylon, etc. covered.
  • Valid for 2 claims during the policy period.

    Depreciation Cover

Error Occured
Error Occured