Zero depreciation insurance (also called nil depreciation cover) is an add‑on to your comprehensive vehicle insurance that ensures you get full claim payouts for replaced parts without deducting depreciation. Normally, insurers reduce your claim amount based on how old parts are (depreciation). zero dep removes that deduction for covered parts during repair claims.

🧠 7 Big Misconceptions — Busted

❌ 1. It Covers Everything in a Claim

Myth: zero dep means you get 100% coverage for all damages.
Truth: It removes depreciation only on replaced parts in accident‑related repairs. It doesn’t cover consumables (e.g., oil, brake fluid), compulsory deductibles, engine damage from non‑accident causes, regular wear and tear, or losses due to major exclusions unless you buy separate add‑ons for those.

❌ 2. It’s Automatically Included in Insurance

Myth: A comprehensive policy already includes zero depreciation.
Truth: No — you must specifically add zero dep to your comprehensive policy (or buy it at renewal). If you don’t, depreciation will still be deducted during claims.

❌ 3. It’s Too Expensive to Be Worth It

Myth: zero dep add‑ons are too costly and not worth buying.
Truth: While premiums do go up (typically 15–20% more), the higher claim payouts in case of part replacements often outweigh the extra cost — especially for newer, expensive, or frequently driven vehicles.

❌ 4. It’s Only for New Cars

Myth: zero dep is only useful or available for brand‑new cars.
Truth: It’s most beneficial for cars up to ~5 years old, but many insurers offer it up to 5–7 years depending on their own policy rules. So even a 3–4‑year‑old car can get this add‑on.

❌ 5. You Can Claim It Unlimited Times

Myth: With zero depreciation, you can make unlimited claims in a year.
Truth: Most insurers limit zero dep claims to a set number per policy period (often 1–2 times). After that, depreciation is applied like normal. Always check your policy’s claim limits.

❌ 6. It Eliminates All Exclusions

Myth: zero dep overrules all exclusions in a car insurance policy.
Truth: It only affects depreciation — it doesn’t remove standard exclusions like driving while intoxicated, unauthorised use, total loss or theft settlement conditions, tyres and batteries (often excluded), etc.

❌ 7. Safe drivers Don’t Need It

Myth: If you rarely have accidents, zero dep isn’t worth it.
Truth: Even careful drivers can data-face unforeseen accidents (e.g., weather damage, vandalism, third‑party mistakes). zero dep protects you from heavy out‑of‑pocket costs in such events — often making it worthwhile even without frequent claims.

📌 Final Takeaway: When zero Dep Makes Sense

✅ Best for:

• New or relatively new cars (under ~5–7 years)
• High repair cost vehicles or luxury cars
• Drivers in busy cities or frequent commuters

❗ Not always ideal for:

• Older cars with low market value
• Vehicles used rarely that may not justify the extra premium

Zero depreciation insurance can significantly increase your claim payout, but it’s not a magic cure‑all. Understand what it truly includes and excludes so you set the right expectations before buying or renewing your policy.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.