Zero depreciation

Zero depreciation is an add-on to own-damage cover. Normally the insurer deducts depreciation on parts it replaces after an accident, so you pay part of the bill. With zero depreciation, that deduction goes away.

Why depreciation matters in a claim

When a part is replaced after a crash, a normal policy does not pay its full price, because a used part had already lost value to wear and age. The insurer applies a depreciation percentage, higher for plastic and rubber parts than metal, and you pay that share. On a claim full of bumpers, lights and panels, those deductions can add up to a large chunk of the repair bill. Zero depreciation removes them, so the claim pays close to the full repair cost.

When it is worth it

Zero depreciation costs extra premium, and it matters most on newer and premium vehicles, where parts are costly and depreciation deductions bite hardest. On an old vehicle with cheap parts, the add-on may cost more than it saves. IRDAI’s rules require each add-on’s premium to be shown separately, so you can see exactly what this one costs before deciding, and the 2024 rules also bar applying depreciation to non-original parts used in repairs.

The bottom line

For a new or expensive vehicle, zero depreciation usually pays for itself the first time you claim. Weigh it against your vehicle’s age and parts cost. See motor insurance explained.