What is Zero Depreciation Car Insurance?

Zero depreciation car insurance, also known as Nil Depreciation Cover offers complete cover without factoring in the depreciation. Thus if your car is damaged in a collision you will receive the entire cost from the insurer during claim settlement. This add-on is only made available to cars aged 5 years or less . It serves as a good option to avoid paying high costs at the time of claim settlement, especially if your car is in the right age bracket.

Benefits of Zero Depreciation Car Insurance

● Referred to as Bumper to Bumper Cover, zero depreciation insurance offers 100% coverage for all rubber, fibre, and metal parts without deduction of depreciation

● Provides compensation for financial burden of damages/losses incurred due to accidents and is essential for both amateur and professional drivers looking to protect their newly purchased cars

● Broadens the cover of basic car insurance by settling repair/replacement expenses of insured parts without considering the depreciation

Role of Zero Depreciation Car Insurance during Claim Settlement

As per the Insurance Regulatory and Development Authority of India (IRDAI) depreciation rates for various car parts are as follows:

Parts	Depreciation Rate
Rubber, nylon, plastic parts, and batteries	50%
Fiberglass components	30%
Wooden parts	1st year - 5%,2nd year - 10% and so on

Thus if you have a basic car insurance policy, the insurer will only reimburse the depreciated value of the replaced car parts, irrespective of the actual cost. In case of zero depreciation cover the aforementioned rates will not affect your claim settlement.

Zero Depreciation Car Insurance vs Comprehensive Car Insurance

It is important to know what differentiates Zero Depreciation Car Insurance Cover from Comprehensive Car Insurance Cover to arrive at the right decision for your situation.

Basis	Zero Depreciation Car Insurance	Comprehensive Car Insurance
Car’s Age	Covers cars aged 5 years or less	Covers cars older than 5 years but less than 15 years
Premium Rate	Relatively High	Relatively Low
Claim Settlement	Offers full settlement coverage and depreciation will not make a dent	Claim amount is based on the current value of the vehicle, which factors in depreciation
Repair cost plastic fiber	Insurer bears the cost	Insured has to shell out money

Who should Buy Zero Depreciation Car Insurance Cover?

Zero Depreciation Car Insurance is highly recommended for people with cars aged 5 years or less to protect their vehicle from potential threats and damages. However, this cover is especially important for the following categories of people:

● Those who have purchased a new car because your vehicle will start depreciating after 6 months and even a slight bump may send your car to the garage. It is recommended you get this cover along with the policy to protect your newly purchased car.

● If you are a new, inexperienced driver and more likely to damage your vehicle, this cover will help you recover the damages through the claim.

● Those who own high-end, luxury cars with expensive spare parts should consider buying this add-on because in the event of an accident, the damage will be relatively higher and cost proportionately a lot more.

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The following events and situations are not covered under this policy -

Cholamandalam MS, a General Insurance Company in India, offers a wide range of insurance policies for individuals and corporates.

For individuals, there are products like Car Insurance, Travel Insurance, Two Wheeler Insurance, Health Insurance, Personal Accident Insurance, Crop Insurance and Home Insurance. For SME's and Corporate Insurance clients, Chola MS offers customized insurance solutions encompassing insurance and risk consulting services such as Group Mediclaim Insurance, Group Personal Accident Policy, Engineering Projects Insurance, Engineering Operations Insurance, Liability Insurance, Marine Insurance, Fire Insurance and other Miscellaneous Insurance Solutions.

All Rights Reserved. Cholamandalam MS General Insurance Company Ltd. Insurance is the subject matter of solicitation. Reg office: 2nd Floor, "Dare House", No.2, NSC Bose Road, Chennai - 600001, India. IRDAI Registration Number : 123. Trade logo displayed above belongs to ‘CHOLAMANDALAM FINANCIAL HOLDINGS LIMITED” (formerly known as TI financial holdings limited) and Mitsui Sumitomo Insurance Company Limited and used by Chola MS under license. CIN : U66030TN2001PLC047977.

Important Message: By submitting your contact information on forms on our website, you agree to be contacted by our Customer Service Representatives.
The advertisement contains only an indication of cover offered. For more details on risk factors, terms, conditions and exclusions, please read the sales brochure carefully before concluding a sale

Zero Depreciation Car Insurance

The following events and situations are not covered under this policy -

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