Zero Depreciation vs Comprehensive Car Insurance: Zero Depreciation is an add-on that ensures depreciation isn’t deducted during claims, helping you get the full cost of parts replaced.
New Delhi: Owning a vehicle is no longer a luxury, it is a necessity. But having one has its challenges, as any unfortunate incident may lead to damage and burn a hole in your pocket. This is why car or motor insurance is important to financially secure yourself. Choosing the right car insurance is crucial, not just for legal compliance but for protecting your long-term investment. Two commonly discussed options are zero depreciation cover and comprehensive insurance. Let’s understand which one you should buy and which one will help you save more in the long run.
Whether zero depreciation or comprehensive insurance saves more over time really depends on stuff like your car, how you drive, and what you prioritise financially.
Zero Depreciation is an add-on that ensures depreciation isn’t deducted during claims, helping you get the full cost of parts replaced.
According to Pankaj Goenka, VP & Head of B2B2C at InsuranceDekho, depreciation usually starts at 10 per cent after the first year and goes up to 50 per cent by the fifth year.
“This add-on is ideal for new or well-maintained cars up to 7–10 years old and significantly increases claim value. Other useful add-ons include consumables cover, roadside assistance, return to invoice, loss of personal belongings, and no claim bonus protection,” Goenka said.
Who Should Opt For Zero Depreciation Insurance
Pankaj Nawani, CEO of CarePal Secure, said that zero depreciation insurance is pretty great for new or high-end cars, frequent claims or if you live in areas where accidents are more common.
Who Should Avoid Zero Depreciation Insurance
According to Nawani, there’s a flip side to the zero depreciation insurance — it usually has higher premiums and limits how many claims you can file (often just 2 per year). So, for older cars, it might not be worth it.
Comprehensive Insurance
Comprehensive insurance covers the essentials, like third-party liability and damages to your vehicle from accidents, theft, or natural disasters, but it factors in depreciation while calculating claims, and you might end up paying more out of pocket for repairs.
Comprehensive insurance covers own damage, third-party liabilities, natural disasters, vandalism, and damage during transit. It’s an all-round protection plan for most vehicle owners.
It works better for older vehicles, for people who don’t drive too much or for those who don’t file too many claims.
“If your car is over 5 years old, lightly used, frequently claimed upon, or planned for resale, a standard comprehensive policy without zero depreciation may be more cost-effective,” Goenka said.
In other words, you should think about your car’s age, how often you’re likely to claim, where you mostly drive, and your budget before picking a motor insurance policy.
