Zero Depreciation Car Insurance Myth: Why It’s Not Always “Zero” in 2026
Zero depreciation car insurance is often marketed as the best protection for car owners. Many people believe it means the insurance company will cover the entire repair cost without any deductions. However, the reality is more complex. Even with zero depreciation cover, certain parts, limits, and conditions may still apply.
In 2026, many car owners in India are surprised during claim settlement because they expect full reimbursement but receive a lower payout. This usually happens due to policy conditions, excluded parts, claim limits, or mandatory deductibles.
In this guide, we explain the real truth behind zero depreciation car insurance, what it actually covers, what it does not cover, and how to choose the right policy for your car. Understanding these details can help you avoid surprises during claim settlement and make a smarter insurance decision.
Zero Depreciation Car Insurance Myth: Why It’s Not Always “Zero” in 2026
When buying car insurance, many people in India are advised to choose Zero Depreciation Insurance, also known as bumper-to-bumper cover. The common belief is simple: if your car gets damaged, the insurance company will pay the entire repair cost without deducting depreciation.
But in reality, zero depreciation insurance does not always mean zero deductions.
Many car owners discover this only when they file a claim and realize that certain costs are still not covered. Understanding the real terms of this add-on is important if you want to avoid surprises during claim settlement.
What is Zero Depreciation Car Insurance?
In a standard car insurance policy, depreciation is deducted on car parts during claim settlement. Since car parts lose value over time, insurers reduce the claim amount based on depreciation rates.
A Zero Depreciation Add-On removes this deduction for many parts, meaning the insurer covers a larger portion of repair costs.
This is why zero dep insurance is very popular for new cars and premium vehicles.
However, it still comes with specific conditions and limits.
Why People Think It Means “Full Claim”
Insurance advertisements often promote zero depreciation as “complete protection” or “no deduction cover”.
Because of this marketing language, many buyers assume that every repair cost will be fully covered.
But every insurance policy contains terms and exclusions that affect claim payout.
What Zero Depreciation Insurance Actually Covers
Zero depreciation mainly removes depreciation deduction on the following parts:
• Plastic parts
• Fiber components
• Rubber parts
• Metal parts
• Paintwork
This means during a claim, the insurer will generally pay the cost of replacing these parts without applying depreciation.
For expensive components like bumpers, this can significantly increase the claim amount.
What Zero Depreciation Insurance Does NOT Cover
This is where most confusion happens.
Even with zero depreciation cover, the following may still apply:
Mandatory Deductible
Every car insurance policy includes a mandatory deductible. This amount must be paid by the car owner during claim settlement.
Consumables
Items like:
• Nuts and bolts
• Engine oil
• Coolant
• Grease
are usually not covered unless you buy a consumables add-on.
Claim Limits
Many policies allow only 2 claims per year under zero depreciation cover.
Age Limit of the Vehicle
Most insurers offer zero depreciation only for cars up to 5 years old.
Older vehicles may not qualify for this add-on.
Confused about insurance add-ons or claim rules?
Understanding policy terms can be difficult for many car buyers.
If you want guidance about choosing the right car insurance or understanding policy features, the team at AutoCred India can help.
Call or WhatsApp: 8826187200
Email: info@autocred.in
Car pasand karo, finance ka tension hum sambhal lenge.
Why Zero Depreciation is Still Useful
Even though it has limitations, zero depreciation cover is still considered one of the most valuable add-ons in car insurance.
Benefits include:
• Higher claim payout
• Lower out-of-pocket repair cost
• Better protection for expensive car parts
• Ideal for new cars
For vehicles in the first 3–5 years, it can significantly reduce repair expenses.
When You Should Definitely Choose Zero Dep Insurance
Zero depreciation insurance is especially recommended for:
• New car buyers
• Luxury car owners
• Expensive spare parts vehicles
• Drivers in high-traffic cities
• People who want maximum claim protection
In these cases, the additional premium is usually worth the protection.
Quick Checklist Before Buying Zero Dep Insurance
Before selecting zero depreciation cover, check the following points:
• Maximum number of claims allowed
• Vehicle age eligibility
• Mandatory deductible amount
• Whether consumables are covered
• Policy premium difference
• Network garage availability
Reading these details carefully helps avoid claim surprises.
Final Thoughts
Zero depreciation insurance is a powerful add-on, but it is often misunderstood. While it reduces depreciation deductions, it does not remove every cost associated with claim settlement.
Understanding the terms, exclusions, and limits of your policy can help you make smarter insurance decisions.
A well-informed buyer is far less likely to face unpleasant surprises during claim settlement.
Need Help Understanding Car Insurance?
If you are buying a new car or reviewing your current policy, expert guidance can make the process easier.
The team at AutoCred India helps customers understand insurance options and make informed decisions.
Call or WhatsApp: 8826187200
Email: info@autocred.in
Car pasand karo, finance ka tension hum sambhal lenge.
FAQs
Is zero depreciation insurance worth it?
Yes, especially for new cars. It reduces depreciation deductions and increases claim payout during repairs.
Does zero depreciation insurance cover all expenses?
No. Mandatory deductibles, consumables, and certain conditions may still apply.
How long can I buy zero depreciation insurance?
Most insurers offer zero depreciation add-on for cars up to 5 years old.
