In the world of car insurance, protection doesn’t just stop at basic coverage. One of the most valuable add-ons available today is the Zero Depreciation Car Insurance cover. This important feature ensures that policyholders don’t have to bear the depreciation cost of their vehicle’s parts at the time of a claim. For those renewing car insurance online, this add-on can mean the difference between partial payouts and full reimbursements.
At TATA AIG, customers can easily include Zero Depreciation Cover while renewing their policy through a hassle-free online journey. With a car garage count of 5,900, 2-click quotes, and a trusted name, enhancing your coverage is both convenient and reliable.
What Is Zero Depreciation Car Insurance?
Zero depreciation, often known as “bumper-to-bumper” cover, is an add-on to your base car insurance policy. Under a standard comprehensive plan, depreciation is deducted from the claim amount based on the age and condition of the car parts. This means the older your car, the lower your payout in case of repairs or replacements.
With zero depreciation car insurance, the insurer waives this deduction. So, in the event of a claim, you receive the entire cost of replaced parts, ensuring a higher reimbursement and reduced out-of-pocket expenses.
Car owners often overlook how much depreciation affects claim settlements. As a car ages, components like rubber, plastic, and fibre start losing value. The Insurance Regulatory and Development Authority of India (IRDAI) defines standard depreciation rates for vehicle parts:
|
Component |
Depreciation Rate |
| Rubber, plastic, nylon, tyres, etc. | 50% |
| Fibreglass components | 30% |
| Glass parts | Nil |
For all other components, depreciation is applied based on the age of the vehicle, ranging from 5% (1 year) to 50% (over 10 years).
Without zero depreciation, these deductions can significantly reduce your claim amount. Adding this cover during your car insurance renewal online can save you a substantial amount, especially for high-end vehicles.
Zero depreciation car insurance is especially beneficial for:
New Car Owners: Protect the full value of a newly purchased vehicle.
Luxury/Sports Car Owners: Expensive parts can be costly to replace without full coverage.
Drivers in Accident-Prone Areas: Frequent repairs can result in high out-of-pocket costs.
Key Benefits of Zero Depreciation Car Insurance
Adding a zero depreciation cover to your policy offers enhanced protection and greater peace of mind. Here are some of the key benefits:
Full Reimbursement Without Depreciation
With this cover, the claim amount is not reduced due to the age or wear and tear of the replaced car parts.
Lower Out-of-Pocket Expenses
Since depreciation deductions are waived, your personal contribution toward repair bills is significantly reduced.
Improved Resale Value
Keeping your car in good condition through timely, fully covered repairs can help maintain its resale value over time.
Ideal for Expensive Vehicles
Luxury or high-end vehicles often have costly components, and zero depreciation ensures better coverage for these parts.
Comprehensive Protection
This add-on works alongside your base insurance policy to offer more complete and reliable coverage.
While this add-on boosts your protection, it’s important to consider:
Vehicle Age: Only applicable for cars up to 5 years old.
Claim Limits: Generally valid for up to two claims per policy year.
Exclusions: Certain components like tyres, tubes, consumables, and glass may not be covered unless stated.
Deductibles Apply: Even with zero depreciation, the standard policy deductible still applies.
Premium Increase: Adding this cover increases the premium slightly, but it is cost-effective in the long run.
Adding zero depreciation cover during renewal is a straightforward process when done online. Here’s how to do it:
Step 1: Visit the Insurer’s Website
Go to the official website of your motor insurance provider, like TATA AIG.
Step 2: Select the Renewal Option
Click on the ‘Renew Car Insurance’ tab. You will be asked to enter your policy details.
Step 3: Enter Car Details
Provide your vehicle registration number, make, model, and manufacturing year.
Step 4: View Policy Details
Check your existing coverage and IDV (Insured Declared Value). Here, you will get the option to edit or enhance your plan.
Step 5: Select Zero Depreciation Add-On
From the list of available add-ons, select Zero Depreciation or Depreciation Reimbursement cover.
Step 6: Review the Premium
The premium will now be recalculated to include the zero depreciation cover.
Step 7: Make Payment
Proceed to pay the final premium via secure online methods such as UPI, net banking, debit/credit card, etc.
Step 8: Get Policy Documents
Once payment is complete, you will receive your updated policy documents via email.
Example: Claim With vs. Without Zero Depreciation
Let’s say your car’s bumper gets damaged and needs repair costing ₹7,000. Here’s how your claim would differ:
| Scenario | Claim Payout | Your Share |
| Without Zero Depreciation | ₹2,500 (after 50% depreciation on plastic parts + deductible) | ₹4,500 |
| With Zero Depreciation | ₹6,000 (only standard deductible of ₹1,000 applies) | ₹1,000 |
As shown, opting for zero depreciation cover during car insurance renewal online dramatically reduces your personal cost.
Though this cover is extensive, some exclusions apply:
Vehicles older than 5 years.
Total loss or theft of the vehicle.
Mechanical or electrical breakdown.
Driving under the influence.
Driving without a valid license.
Damage to parts not listed, like consumables, unless separately covered.
While both offer protection for your vehicle, it’s important to understand how a standard comprehensive policy differs from a zero depreciation add-on in terms of coverage, eligibility, and claim settlement.
| Aspect | Comprehensive Insurance | Zero Depreciation Add-On |
| Nature | Base policy | Optional add-on |
| Coverage | Own damage + third party | Removes depreciation deduction on claims |
| Premium | Standard | Slightly higher with add-on |
| Eligibility | All cars | Cars up to 5 years old |
| Claim Settlement | After depreciation deduction | Without depreciation deduction (as per policy terms) |
Conclusion
Adding zero depreciation car insurance during your car insurance renewal online is a prudent move, especially for those looking to maximise claim benefits and reduce out-of-pocket repair costs. While it slightly increases your premium, the potential savings during claims can far outweigh the additional cost.
This add-on ensures your vehicle receives the best possible coverage, especially if it’s new, expensive, or frequently used. When renewing your car insurance, make sure to evaluate the full list of available add-ons and choose the combination that provides the most comprehensive protection for your needs.
