While taking car insurance the most confusion occurs when we are unable to decide which insurance to get. That is why today we will talk about which insurance should be taken and especially about nil depreciation cover which we also know by the name of bumper to bumper and zero dep cover.
What is Nil Depreciation Cover?
Normally when we make a claim for any kind of accidental loss under car insurance, the insurance company deducts some part of the loss of parts and their different percentage is fixed , like 50% for plastic part, 30% for metal part. Which we can call depreciation part.
But if we have a nil depreciation add-on cover, then no depreciation will be deducted and we will get the full amount of the claim, that is, whatever the cost of the brand new part is, that will be paid.
Example:
If your car\’s bumper gets damaged and its new cost is ₹10,000 –
Without Nil Depreciation: You will get only ₹5,000 (50% plastic part depreciation)
With Nil Depreciation: You get full ₹10,000 !
For whom is this cover necessary?
Owners of new cars (0-5 years old)
Owners of luxury or premium cars
First-time drivers or city drivers whose area has a higher risk of accidents
Those who want peace of mind without the tension of depreciation.
Benefits of Nil Depreciation Policy:
1. Higher claim amount – No deduction on replaced parts
2. Better financial protection – No need to pay extra money from pocket
3. More value for premium paid – Premium is a little higher, but there is a big saving at the time of claim.
Along with this, there are some other covers with great benefits, about which I will tell you:
1. Engine Protect Cover
It covers engine damage (water ingression or oil leakage), which is not covered in the normal policy.
2. Roadside Assistance (RSA)
If the car breaks down, you get 24×7 help like towing, battery jump, fuel delivery, flat tyre repair, etc.
3. Return to Invoice (RTI)
If the car is totally damaged or stolen, you will get the invoice value (on-road price), not the depreciated value.
4. Consumables Cover
Consumable items like nuts, bolts, engine oil, AC gas are not covered in a normal policy – this add-on covers them too.
5. Key Replacement Cover
If the car key is lost or stolen, the cost of replacement is covered.
6. Tyre Protection Cover
Even if the tyres are damaged, a claim for replacement/repair is available – usually useful for high-end cars.
Do all companies offer Nil depreciation add on cover?
Most private insurers like HDFC Ergo, ICICI Lombard, Tata AIG, Bajaj Allianz, etc., offer this add-on – but eligibility and terms may vary. Read the terms & conditions carefully before buying the policy. Nationalised companies also offer Nil depreciation policy but only private companies are good after 5 years.
Is the premium higher?
Yes, adding Nil Depreciation increases your premium a little (10-15% approx), but it saves money at the time of claim. So it\’s a wise investment!
Conclusion:
If you want total protection of your car without worrying about part depreciation, then you should definitely take Nil Depreciation Cover. Also, if you are taking a long-term coverage plan, then other add-ons can also save you from financial stress.
What is your opinion?
Have you ever claimed nil depreciation? How was your experience?
If you have any questions or confusion regarding Nil Depreciation Car Insurance, do share in the comments below. I will personally answer your questions!