What Is Zero Depreciation Car Insurance?

What Is Zero Depreciation Car Insurance?


Similar to any other tangible asset, depreciation applies to your car. For those who don’t know, depreciation is the devaluation of any asset over time due to normal wear and tear. Typically, it’s the car owner responsible for the depreciation liability, not the insurance company.

So, the compensation amount becomes subject to reduction when it comes to claiming the settlement of your motor vehicle. That’s because the car’s and its accessories’ depreciated value gets deducted from it.

This is exactly where zero depreciation car insurance comes to aid.

Understanding Zero Depreciation Car Insurance Policy

If you take cr insurance along with a zero depreciation policy, you’ll be able to safeguard your automobile vehicle against any damage or wear and tear without involving any depreciation.

Indeed, regular motor insurance offers substantial coverage against losses incurred due to any stolen or damaged car incident. But these policies reimburse the compensation amount only after deducting the depreciation value.

Meanwhile, a zero depreciation car insurance policy ensures reimbursing you the full compensation amount. You can opt for this add-on cover policy during policy renewal or when you’re buying a new vehicle.

In this policy, the car insurance company pays the whole claim amount to you without factoring in the car’s depreciation value. However, to get such an amazing benefit, you may have to pay slightly more premium than any regularcar insurance. If you need a way to eliminate any out-of-pocket, unwanted expense on the car, this is the policy for you!

Why Opt For a Zero Depreciation Add-On Policy?

→ A Money-Saving Add-on Cover

When it comes to a claim, the zero depreciation car insurance add-on eliminates your need to pay any expense from your own pocket. With this add-on, you won’t have to pay for the depreciation cost of the car and its parts. The insurance company takes care of it.

→ Higher Compensation Amount

With a zero depreciation add-on, you can safeguard yourself from the cost of depreciation of your car’s parts. This eliminates the need to calculate the depreciation costs and fetches you a higher compensation amount at the time of claim settlement.

→ Simple & Convenient

A zero-depreciation car insurance policy ensures you won’t have to bear any unwanted expense from your savings at the time of claims. This policy backs you up financially during hard times and takes care of all unsudden spending. The simple and convenient add-on cover will give you the peace of mind you need during financial hardships.

Zero Depreciation Car Insurance Vs. Normal Car Insurance: Which Is Better?

Here is a table showing the explicit difference between these two insurance covers.

Basis Zero Depreciation Car Insurance Normal Car Insurance
Premium High Low
Claim Provides compensation amount without factoring in the depreciation cost. Provides a claim amount by considering the recent car value, which factors in the depreciation cost involved.
Car Age Up to 5 years of coverage for new cars Offers coverage to a car less than 15 years of age
Repair & Damage Cost The insurance company bears the majority of such expense The policy holder has to bear the majority of the expense from their own pocket

Given these parameters, it’s safe to say that zero-depreciation car insurance is always better than any normal car insurance policy. The only downside we can see is the high premium cost – which is justified given the advantages you get from this add-on cover.

Applicability of Zero Depreciation Car Insurance Add-On

The zero depreciation car insurance add-on coverage is applicable for repairs and replacement when:

  • It incurs damage due to man-made and natural disasters such as floods, earthquakes, landslides, vandalism, riots, or terrorist attack.
  • It meets any accidental damage.
  • It incurs damage during transit from one location to another.


If you intend to bring home a new car anytime soon, you must buy car insurance onlinethat comes with zero depreciation coverage.

Given the considerable amount of money you’ll be spending on buying a new car, it will be no harm and indeed beneficial to get car insurance with the right add-on to prevent yourself from any unwanted expenses in the long run.


What is excluded from a zero depreciation add-on?

In a zero depreciation car insurance cover, the following things are excluded:

  • Wear and tear on bearings, tyres, clutch plates, and more
  • Cost of oil
  • Water ingression or oil leakage causing car engine damage
  • Cars with more distances covered than usual
  • Maximum number of claims
  • Cars that are aged above five years

What should I consider when buying a zero depreciation add-on cover?

Here are a few things to remember when buying zero-depreciation car insurance coverage:

  • It does not deduct the depreciation cost from the compensation amount.
  • The availability of this add-on is solely for automobile vehicles aged less than five years.
  • Ensure it comes with a certain number of zero depreciation claims in a year.

How can I buy zero-depreciation car insurance coverage online?

You can buy a car insurance online policy with zero depreciation add-on coverage by visiting the official page of Future Generali.