All about Comprehensive Motor Insurance

What Is Comprehensive Motor Insurance?

A comprehensive motor insurance policy offers financial protection against any loss or damage caused to your motor vehicle due to accidents, theft, fire, natural calamities, civil disturbance, etc. It also covers injuries caused to you or the third party or any damages caused to the third party property because of an accident.

Benefits Of A Comprehensive Motor Insurance Policy

There are a lot of benefits of purchasing a motor insurance plan, like -

  • It is available at a nominal cost.
  • The buying process is very hassle-free.
  • It offers protection to your vehicle against a wide range of risks.
  • It provides compensation in case of accidental disability or death.

What Is The Zero Depreciation Add-On? How Does It Work

Also known as Nil Depreciation or Bumper to Bumper cover, the Zero Depreciation is an add-on that doesn't consider ‘depreciation’ factor from the policy coverage.

Generally, as a vehicle gets old, it undergoes depreciation, i.e., it loses its value over time. And when you make a claim under the policy, the insurance company factors in the depreciation for the parts of the car, deducts it from the IDV of the vehicle, and then pays the claim.

The Zero Depreciation add-on ensures that depreciation is not considered at the time of claim settlement. It covers all parts of your car at original cost except tyres, tubes, and batteries which are covered at 50% cost. Also, some insurers allow you to claim only twice under this add-on, whereas other insurers (like IFFCO Tokio) allow you to claim unlimited times during the tenure of your insurance policy.

Why You Should Opt For The Zero Depreciation Add-On?

You can opt for the Zero Depreciation add-on if

  • You have purchased a new vehicle.
  • You own an expensive/ luxury vehicle.
  • You live in a city that is more prone to accidents.
  • You worry about minor bumps and dents.
  • You have a vehicle with expensive spare parts.
Opt Zero Depreciation Add-on in Motor Insurance

Benefits Of the Zero Depreciation Add-On

Here’s a list of benefits provided by the zero depreciation add-on -

  • It increases the coverage of your base plan.
  • The repair costs of your vehicle are considered without the
    depreciated value. Hence, it helps in saving money in the longer run.
  • The claim amount recived after purchasing zero depreciation add-on is comparatively high.
  • It helps curb out-of-pocket expenses since depreciation cost is not considered while calculating the claim.
Benefits of Zero Depreciation Cover

Buying A Comprehensive Motor Insurance Policy With Or Without Zero Depreciation Cover


Both these insurance provides benefits mentioned below -

  • Protection against own damages and third party liabilities.

  • Allow discounts for installing anti-theft devices, membership of Automobile Association, etc.

  • Allow you to claim on a cashless basis.

  • Offer coverage for one year.

  • Allow you to select other add-on covers.


Comprehensive Policy With Zero Depreciation Cover Comprehensive Policy Without Zero Depreciation Cover
Depreciation Coverage Here, depreciation will not be considered at the time of claim settlement. Here, depreciation will be considered at the time of claim settlement.
Premium The premium is slightly higher. The premium is lower.
Claim Settlement The amount you receive will be higher as depreciation is not considered. The amount you receive will be lower as depreciation is considered.
Availability Only available for vehicles up to 5 years old. Available for vehicles of all ages.
Number Of Claims There can be restrictions on the number of zero depreciation claims you can make. There are no restrictions - you can make unlimited claims.

Depreciation Rates With And Without Zero Depreciation Cover

Here are the applicable depreciation rates based on the age of a vehicle.

Vehicle’s Age Rate Of Depreciation Without Zero Depreciation Cover Rate Of Depreciation With Zero Depreciation Cover
Less than 6 Months Nil 0%
6 Months to 1 Year 5% 0%
1 Year to 2 Years 10% 0%
2 Years to 3 Years 15% 0%
3 Years to 4 Years 25% 0%
4 Years to 5 Year 35% 0%
5 Year to 10 Years 40% 0%

Depreciation Rates That Are Applied On Vehicle Parts

Parts Of The Vehicle Rate Of Depreciation Without Zero Depreciation Cover Rate Of Depreciation With Zero Depreciation Cover
Nylon, Rubber & Plastic Parts 50% 0%
Fibre Parts 30% 0%
Glass Parts Nil 0%
Wooden Parts Nil 0%

Example: Say you apply for a claim wherein the fibre parts are repaired at a cost of INR 10,000, and nylon parts are repaired at Rs. 5000. Let’s look at the claim payable under both - a policy with zero depreciation add-on, and a policy without the zero depreciation add-on.

Parts Of The Vehicle That Are Repaired Claim Payable In A Policy Without Zero Depreciation Cover Claim Payable In A Policy With Zero Depreciation Cover
Nylon Parts 50% of 10,000 = 5000 100% of 10,000 = 10,000
Fibre Parts 70% of 5000 = 3500 100% of 5000 = 5000
Total Claim Payable by the insurer 8500 15,000

So, if you don’t have a policy with the zero depreciation cover, you’ll have to pay the depreciation cost of Rs. 6500 out of your own pocket. This brings us to the end of this article.

At the time of a motor insurance claim, the insurance company will deduct the depreciation value of the vehicle and then pay the claim. If you want to avoid this, you can opt for the Zero Depreciation add-on with your comprehensive motor insurance plan. With this add-on, depreciation will not be considered at all while calculating the claim amount.

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