Difference Between Comprehensive and Zero Depreciation Insurance Cover (2024)

Comprehensive Insurance + Zero Depreciation = 100% Satisfaction 😊

Confused because you thought comprehensive insurance and zero depreciation were interchangeable terms? Well, no. Though both Comprehensive Insurance and Zero Depreciation plans protect your vehicle but differ considerably in the coverage they provide.

Zero Depreciationis an ‘Add on’ cover, in other words, an added benefit that can be bought witha Comprehensive Insurance policy. So, basically, Zero Depreciation is an add-on that comes with the ComprehensiveMotor Insurance policy but not a complete insurance policy itself.

Let’s understandthe whole thing in detail to give you a better understanding.

What is Comprehensive Insurance?

Comprehensive Insurance is the most extensive policy for motor vehicles as it protects bothcarsandbikes from accidents, theft, natural disasters, and more.

As the name suggests, it’s the ‘complete package’ that covers any damage to the vehicle, its occupants and the ‘third party’ in case of any mishap, while a third-party insurance policy covers damage to only third party. This is the main difference between comprehensive and third party insurance.

By and large, Comprehensive Insurance covers:

• Damage to your vehicle due to an accident
• Personal injury during an accident
• Theft of your vehicle
• Damage to your vehicle due to fire
• Damage to your vehicle due to natural disasters
• Damage to the vehicle or property of a third party due to your vehicle in an accident
• Injury to a third party due to your vehicle during an accident
• Various add-on covers to provide extended protection to your vehicle

Now, here’s where Zero Depreciation Add-on makes a grand entry!

Since comprehensive insurance is a premium motor insurance policy, you have the option to choose from various ‘Add on’ covers or ‘Benefits’. These covers can be availed at a slight premium over the basic insurance policy cost.

There are plenty of ‘Add on’ covers such asroadside assistance, engine protection cover, consumable cover, etc., and Zero Depreciation is one of the ‘Add on’ covers that you can choose from among a plethora of lucrative added insurance benefits for your vehicle!

Zero depreciation add-on cover boosts your comprehensive car insurance policy.

By opting for this cover, you ensure that you will be paid the full repair cost for your damaged bike or car parts. The insurer will NOT deduct any depreciation (decrease in vehicle’s value due to wear and tear and age) cost.

So, this add-on helps you at the time of claim, as you won’t have to shell out extra money from your pocket for repairs. Also, remember that the depreciation amount is calculated as per depreciation rates set by IRDAI.

Suppose you own a 3-year-old car and you are eligible for a claim amount of ₹30,000. Now, the insurance company has calculated the total cost of your car part depreciation to be ₹5,000.

Then, if you don’t have zero-depreciation cover with comprehensive policy, you will be paid only ₹25,000 as insurer will deduct the depreciation cost.

However, if you have a zero-depreciation cover then you will receive the entire ₹30,000 as your claim amount!

So, a comprehensive policy without a zero-depreciation add-on is a better choice for you if you own an older vehicle (where depreciation is significant).

While opt for azero-depreciationadd-on if you own luxury vehicles or if you do not want any bummers at the time of claims.

A comprehensive car insurance is one of the most preferredtypes of car insurance policies in India

Aging comes with its drawbacks. The same applies to your vehicle. The older it gets, the more the value of your car or bike drops or ‘depreciates’. But, not to fret, this ‘Add on’ ensures that the value of your vehicle will remain as valuable as the day you bought it!

So, here’s why you need a zero-depreciation cover:

• Higher Claim Amount: With zero depreciation cover the depreciation on your vehicle parts won’t be calculated. So, you will get the full cost of repairs or replacements for damaged parts, thus, increasing claim amounts.

• Save Money: If your vehicle gets damaged in an accident, then with this no cost of wear and tear will be subtracted, implying that you will save depreciation money in the long run.

• Better Protection: Buying Zero Dep addon is especially beneficial for you if you’ve bought a new vehicle or own luxury cars and bikes, because in case of expensive parts you will get full financial coverage without depreciation cuts.

Rest assured, with zero depreciation cover your beloved vehicle will always remain 100% as good as new!

Thus, now you know that comprehensive insurance is one of the types of motor insurance in India while zero depreciation cover is an optional add-on that you can buy to get higher benefits with the comprehensive policy.