Zero Depreciation or Nil Depreciation add on cover allows the insurer to pay the claim towards replacement of spares without deduction towards depreciation, thereby paying 100% cost of replacement.
This cover is available generally for vehicles up to 5 years of age only. In the case of damage to the vehicle, the standard motor package policy pays for the replacement of parts after deducting applicable percentage towards depreciation based on the age of the vehicle.
Zero/Nil depreciation cover is usually not a part of a standard car insurance policy. It is an additional cover available for the customer to opt for at an extra cost.
The cover includes full cost of plastic, rubber, fibre and glass parts
Zero depreciation also covers the cost of plastic, rubber, fibre and glass parts in full due to accidental damage during claims. In the absence of the Zero dep cover, the customer has to bear the full cost of the plastic, fibre, glass and rubber parts.
Special package policies
However, few insurers offer special package policies with covers like Zero Depreciation as standard inclusion for specific new-age models and high-end brands of cars.