Your 10 year old car may not get you the original price when you sell it, but your insurance can ignore the depreciated value. How?- Through Zero Depreciation Cover!

Isn't it sad that a car that you bought for 8 lakhs is worth less than half its price over a few years?

It's even worse if it gets stolen or damaged beyond repair in a road accident. Your insurance gets you pennies for the vehicle in that case. But what if there was a way to override the depreciation cost? And there is!

A Zero Depreciation Insurance, also known as Nil depreciation or bumper to bumper insurance comes as an "add-on" feature in a car insurance policy. It enables you to claim the full value of any car parts or repairs that get damaged in a claimable event.

Rate of Depreciation of Car Parts

The different parts in your car lose value through wear and tear. With time, their original value keeps reducing. But since they are made of different materials, the rate of depreciation is not the same for all of them. You can read the list below to know more about this.

@50% - Tyres, tubes, airbags, batteries, parts made of plastic, rubber and nylon, and material cost of the paint.

@30% - Components made of fibre glass

@0% - All parts made of glass

If you are claiming for insuring the above types of parts, you would only get the depreciated value. But this would not be the case if your policy has a 'zero depreciation' clause.

When should you buy a Zero Depreciation Cover?

This add-on feature is ideal for those car owners who fit in at least one of the below categories.

  • Your car is expensive.
  • The parts of your car are expensive.
  • You are a new driver.
  • You often drive in an accident-prone area.
  • Dents or scratches highly affect you.

A nil depreciation cover might cost you a little more than your regular insurance policy, but it has its own sweet advantages.