What Is Zero Depreciation Insurance? Coverage, Cost, and Claims Explained
Direct answer: Zero depreciation insurance is an add-on that reduces depreciation deductions on eligible vehicle parts during a covered repair claim. This can increase the claim amount and reduce your out-of-pocket repair costs. It is usually more useful for newer vehicles, but the coverage, exclusions, claim limits, and eligibility depend on the insurer and policy terms.
Key Takeaways:
- Zero depreciation cover reduces depreciation deductions on eligible parts when you make a covered repair claim.
- It can increase your claim amount, but deductibles and excluded costs still apply.
- The premium depends on factors such as your vehicle’s age, make and model, IDV, location, repair costs, accessories, and the insurer’s pricing.
- Zero Dep Cover is an add-on, not a replacement for your base car insurance policy.
- It does not cover total loss, theft, consumables, tyre and tube damage, or mechanical breakdown, etc. The compulsory deductible still applies.
What Is Zero Depreciation Insurance?
Zero depreciation insurance, also called zero-dep or nil depreciation cover, is an add-on that can help you get a higher claim amount for eligible repairs by avoiding depreciation deductions on covered vehicle parts.
Normally, if your car or bike gets damaged in an accident and a part needs to be replaced, the insurer may deduct depreciation from the part’s cost before settling the claim. With zero depreciation cover, this deduction doesn’t apply to parts covered by the add-on.
You still have to pay the applicable deductible and any costs that are not covered by the policy.
Is Zero Depreciation the Same as Bumper-to-Bumper Cover?
Yes. Bumper-to-bumper cover is commonly used to refer to zero depreciation cover.
You may also see terms such as zero-dep insurance, zero depreciation insurance, nil depreciation cover, and depreciation reimbursement for similar coverage.
However, the exact coverage can vary between insurers. Before buying the add-on, check the covered parts, exclusions, vehicle-age limit, and whether there is a limit on the number of claims.
What Are the Depreciation Rates in Motor Insurance?
Depreciation rates in motor insurance depend on the type of vehicle part. Some parts have a fixed depreciation rate, regardless of how old your car or bike is. For metal, wood, and other parts, the rate is based on the vehicle’s age.
Depreciation Based on Vehicle Parts (Fixed)
| Part type | Depreciation applied |
|---|---|
| Rubber, plastic, nylon parts, tyres, tubes, batteries and airbags | 50% |
| Fibreglass parts | 30% |
| Glass parts | Nil |
Depreciation Rate by Vehicle Age (Metal, Wood & Other Parts)
| Age of vehicle | Depreciation applied |
|---|---|
| Up to 6 months | Nil |
| More than 6 months to 1 year | 5% |
| More than 1 year to 2 years | 10% |
| More than 2 years to 3 years | 15% |
| More than 3 years to 4 years | 25% |
| More than 4 years to 5 years | 35% |
| More than 5 years to 10 years | 40% |
| More than 10 years | 50% |
How Much More Do You Get With Zero Depreciation Cover? (A Worked Example)
Zero depreciation cover can increase your claim amount for eligible repairs because the insurer does not deduct depreciation from covered parts. Here’s a simple example.
Suppose your vehicle needs ₹10,000 worth of repairs after an accident.
| Claim calculation | Without zero dep | With zero dep |
|---|---|---|
| Repair cost | ₹10,000 | ₹10,000 |
| Depreciation deducted | ₹2,000 | ₹0 |
| Amount before compulsory deduction | ₹8,000 | ₹10,000 |
In this example, zero depreciation cover gives you ₹2,000 more before the compulsory deductible is applied. The applicable deductible is then subtracted from the claim amount before settlement.
For Navi motor insurance, the compulsory deductible depends on your vehicle. It is ₹100 for all two-wheelers. For cars, it is ₹1,000 for engines up to 1500cc and ₹2,000 for engines above 1500cc.
What Does Zero Depreciation Not Cover?
A zero depreciation add-on does not cover the following:
- Total loss or constructive total loss of the vehicle
- Replacement of certain parts, such as tyres and tubes
- Driving without a valid licence
- Driving under the influence of alcohol or drugs
- Consumables such as nuts and bolts, engine oil, brake oil, lubricants, etc.
- Mechanical or engine breakdown
- Compulsory deductibles
- Vehicles above the age limit of 5 years
Coverage and exclusions depend on your insurer and policy, so check the terms of your zero depreciation cover before making a claim.
How Is the Zero Depreciation Premium Calculated?
The premium for zero depreciation cover depends on a few factors related to your vehicle and its insurance policy. These include:
- Vehicle’s age: Newer vehicles may have different zero depreciation premiums than older ones, as insurers may set age limits and pricing based on the vehicle’s age.
- Vehicle make and model: The make and model can affect the cost of replacement parts and, in turn, the zero depreciation cover premium.
- Insured Declared Value (IDV): Your vehicle’s IDV can affect the overall own damage premium and the cost of add-on covers.
- Location: Where you register and use your vehicle can affect the premium because insurers consider location-based risk when pricing motor insurance.
- Repair and replacement costs: Vehicles with more expensive parts or higher repair costs may have a higher zero depreciation premium.
- Additional accessories: Accessories fitted to your vehicle can increase the premium if you choose to cover them under the policy.
- Insurer’s pricing: Each insurer may use its own pricing method, eligibility rules, and terms for zero depreciation cover.
Comprehensive Insurance vs Zero Depreciation Cover: How Do They Fit Together?
Zero depreciation is not a separate policy. It is an add-on that you attach to a comprehensive (package) or standalone own damage policy, and it only changes how own damage claims are paid.
| Coverage | Comprehensive Policy | Standalone Own-Damage Policy | With Zero Depreciation Add-On |
|---|---|---|---|
| Third-party liability | Yes | No | Depends on the base policy |
| Damage to your own car | Yes, subject to applicable depreciation | Yes, subject to applicable depreciation | Yes, with no depreciation deduction on covered parts, subject to the add-on terms |
| Applies to third-party claims | Yes | No | No |
| Theft or total loss | Settled as per the policy’s IDV and terms | Settled as per the policy’s IDV and terms | Same as the base policy; zero depreciation does not increase the IDV |
Pros and Cons of Zero Depreciation Cover
Pros
- Lower out-of-pocket cost on eligible parts.
- More predictable repair costs.
- Useful for newer cars and bikes.
Cons
- You pay an additional premium, since zero depreciation is an add-on.
- The compulsory deductible, and any voluntary deductible you choose, still applies.
- It does not cover consumables, mechanical or electrical breakdown, and other items excluded under the policy.
- Some insurers may limit the number of zero depreciation claims you can make during the policy period.
- It does not increase your vehicle’s IDV or total loss payout.
- Making a claim can affect your No Claim Bonus at renewal.
If you want Zero Dep Cover with your motor insurance, Navi lets you add it to either its Package Insurance or Own Damage Only Insurance, both available on the Navi app.
With Navi, you can:
- Pay less for eligible repairs by avoiding depreciation deductions on eligible parts when you make a covered claim.
- Choose where to repair your vehicle, with cashless repairs at Navi network garages or reimbursement at a garage of your choice.
- Get 24/7 claims support whenever you need help.
- Enjoy quick, hassle-free policy issuance with minimal documentation and instant policy access through the Navi app.
- Open the Navi app and go to the motor insurance section.
- Enter your registration number.
- Add your previous policy details if you’re renewing or switching, so your NCB carries over.
- Choose a comprehensive (Package Insurance) or Own Damage Only plan, since you can’t add Zero Dep to a Liability Only policy.
- Select Zero Depreciation Cover from the add-ons list.
- Review your updated premium, plan, and IDV.
- Pay online to get your policy instantly in the app.
- Open the Navi app or website and go to the motor insurance renewal section.
- Enter your registered mobile number and tap Send OTP.
- Verify the OTP to log in to your account.
- Enter your policy number, registration number, and policy expiry date.
- Review your current plan and select Zero Depreciation Cover from the add-ons list.
- Complete a quick self-inspection on your phone if your policy has expired or the app prompts you to do so.
- Review your updated premium, plan, and IDV.
- Pay online and get your renewed policy with Zero Dep Cover instantly in the app.
Step 1: Report the loss to Navi
Call +91 7406012341 or email [email protected] to report the loss.
Step 2: Get your car inspected
A surveyor will assess the damage before repairs begin.
Step 3: Choose a repair option
- Cashless repair: Take your vehicle to a Navi network garage. After approval, Navi settles the approved amount directly with the garage.
- Reimbursement: Get your car or bike repaired at a garage of your choice and submit the required documents to Navi for reimbursement of the approved claim amount.
Step 4: Submit the repair bill and required documents
Navi reviews the repair bill and required documents and issues a Claim Amount Confirmation.
Step 5: Receive the claim amount
Navi pays the approved claim amount within 7 working days after receiving all the required documents, subject to the applicable policy terms and claim requirements.
FAQ
Zero depreciation cover reduces depreciation deductions on eligible parts during a repair claim. RTI cover applies to theft or total loss and can pay up to the vehicle’s original invoice value instead of only its IDV, subject to policy terms. Navi offers both as add-ons.
Check your Policy Schedule to see whether Zero Dep Cover is listed as an opted add-on. If it is not listed there, the cover is not included in your policy.
Your car’s age can affect how much you pay for insurance. Zero depreciation only affects how your claim is settled. It means the insurer does not deduct depreciation from eligible parts when you make a covered claim, subject to the policy terms.
It depends on the insurer and the product. However, for example, with Navi, there is no limit on the number of Zero Dep claims you can make during your policy period. Each claim is still subject to the policy terms and conditions.
It depends on the insurer and the product. However, for example, with Navi, Zero Dep Cover transfers to the buyer along with the motor insurance policy once the required transfer process is complete.
