What Is Covered Under Zero-Depreciation Car Insurance Policy? 

A car’s overall value depends on its various parts. As the vehicle becomes old, the spare parts depreciate. Do you know that you can protect your vehicle from high depreciation under a zero depreciation cover car insurance policy? Read further to understand how the policy works. 

Just like it is essential for you to look after your health as you age; you must also take care of your assets like the car. In the case of assets, their value is determined in terms of depreciation value. The older the asset, the higher, will be its depreciation value. 

Your car may lose its value as its depreciation factor is associated with all the various mechanical and components in it. Each spare part has a different depreciation rate. For instance, there’s a situation where your car gets damaged in an accident. The insurance company will approve the claim by deducting the depreciation value. As a result, you have to pay from your pocket to meet the balance repair cost. To make sure, you do not face such a situation; you need to avail Zero-Depreciation cover Car Insurance.


What is Zero-Depreciation cover Car Insurance?

Under Bumper to Bumper insurance policy or Zero-Depreciation Cover, the depreciating value of the spare parts is not subtracted, and you receive 100% coverage for repair & replacement in case of accident, theft, or any other incidence where your vehicle gets damaged. It is the most preferred add-cover most people avail under car insurance. 

Your comprehensive car insurance covers third-party liability, damages to self, and damages due to man-made or natural calamities. Depreciation cover is not included in the policy by default. It would help if you opted for it as an add-on option. 


What does the policy cover?

  • The add-on option covers rubber parts, fiberglass components, plastic, and nylon parts
  • You get 100% coverage for the damages 
  • You can avail of the rider option at the time of policy purchase or during the renewal


What does the policy not cover?

  • The policy does not cover normal wear and tear of the vehicle 
  • Damages to the engine due to oil leakage
  • Damages due to mechanical breakdown

The IRDA has fixed rates of depreciation on car parts and accessories that insurance companies must adhere to. Below is the table of depreciation rate:

Car parts

Depreciation Rate

Rubber/plastic parts, batteries, tyres/tubes, etc.


Accessories made of glass and fiberglass


Car Paint


Metallic parts & accessories (depending on vehicle’s age)



The insurance company adheres to the below depreciation rate for all other car parts:

Vehicle’s age

Depreciation Rate

Until 6 months


More than 6 months but less than 1 year


1-2 years


2-3 years


3-4 years


4-5 years


5-10 years


10 years and Above



Who should opt for add-on cover?


Zero-Depreciation to cover is a must-have cover, if:

  • You own a new or luxury car
  • You’re living in an area where incidents of theft, burglary is high
  • You’re an inexperienced driver or do not have a good driving record


Few things to remember when choosing Zero-Depreciation Policy

  • You will have to pay an extra premium
  • There will be a restriction on the number of claims

Now that you know about Zero-Depreciation Car insurance, it is advisable that you purchase this coverage to reduce your financial liabilities. Make sure to read the terms carefully to understand their inclusions and exclusions. It will help avoid any legal issues later when you file for a claim.
Read more about importance of zero-depreciation car insurance.

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