Zero Depreciation cover, explained

Zero Depreciation cover is an optional cover that pays the full cost of the parts a repair replaces, with nothing taken off for their age. It is one of the most popular optional covers among drivers, especially on new cars, and you can compare it with the rest on our full list of optional covers. Without it, a standard plan takes an amount off every replaced part for its age, so the money you receive is less than the repair bill.

Depreciation is the value a car and its parts lose as they get older. A standard plan works out that lost value part by part and takes it off the payout. The amount taken off runs up to 50% on plastic, rubber and nylon parts, and 5% to 15% on metal parts in the first few years, rising as the car gets older. On a modern car, where the bumpers, the lamp units and most of the panels inside the cabin are plastic, that share of the bill is larger than most owners expect.

Zero Depreciation cover removes that deduction. Kiwi pays the full cost of the replaced parts, and your share of the claim comes down to your deductible, which is the fixed part of every claim you pay yourself, plus anything your policy does not cover.

Optional covers are also called add-ons or riders. All 3 words mean the same thing: an extra protection you choose on top of your base plan, for an extra premium. So a quote that lists a zero depreciation add-on or a zero dep rider is offering this same cover.

It attaches to an Own Damage or Comprehensive Plan

Zero Depreciation cover attaches to the own-damage side of a policy, which is the part that pays for damage to your own car. You need a Comprehensive Plan or a standalone Own Damage cover before you can take it. It cannot be added to a Third-Party plan, which holds nothing for your own car.

It is best taken while the car is new

Insurers offer this cover freely on young cars. Most offer it only on cars up to 5 years old, so a car past its fifth year usually cannot get it at all, and the rate for it tends to rise as the car gets older. The share a standard plan takes off metal parts also rises every year, so the cover does more on each repair as the car ages within those 5 years. That is why the time to add it is when the car is new, and to keep it at each renewal until the fifth year.

Bumper to bumper is the name most likely to mislead. It sounds like the whole car is covered end to end. What it removes is one deduction on replaced parts, and the sections below set out exactly where it stops.

The short version. Zero Depreciation cover changes how much a repair claim pays you. It does not make a claim payable that your policy would otherwise turn down, and your deductible stays the same.

The amounts a standard plan takes off follow the schedule set by the Insurance Regulatory and Development Authority of India (IRDAI). Your policy document lists the ones that apply to your car.

Nobody picks which parts get the benefit

This is not a decision made on each claim. If Zero Depreciation cover is on your policy document, the age deduction comes off every part the claim replaces, apart from the 3 exceptions in the table above, which were never inside the cover. There is no list to argue over and no part left out at the last moment.

Tyres and tubes, batteries and consumables are the 3 exceptions. Everything else a repair replaces is paid in full.

Zero Depreciation cover starts at about ₹1,500 a year for a small car and rises with the value of the car and the cost of its parts. The bands below show what it typically comes to.

The premium is worked out as a share of your own-damage premium, which itself follows your car's Insured Declared Value (IDV). A car worth more has parts that cost more to replace, so the cover that pays for those parts costs more as well. Goods and Services Tax (GST) is added on top, as it is on every part of the premium.

Ranges are indicative for a car in a large city, before Goods and Services Tax (GST). What you actually pay depends on your car, its Insured Declared Value (IDV), its age and where you live.

Is it cheaper on a new car than at a later renewal?

It is not usually cheaper to wait. Insurers tend to charge a higher rate for this cover as the car gets older, even while its Insured Declared Value (IDV) falls. Most insurers also stop offering it once the car passes 5 years. So the time to take it is when the car is new, and to keep it at each renewal until the car turns 5.

Does the price differ much between insurers?

Yes, and by more than most people expect for the same cover on the same car. What differs alongside the price is the claim limit, the age of car each insurer will offer it on, and what the insurer does for you on the day you claim. Compare those 3 things next to the premium rather than the premium on its own.

Take a ₹50,000 repair after an accident on a hatchback in its third year, with an engine of up to 1,500cc, such as a Maruti Suzuki Swift or a Hyundai i20, where the deductible is ₹1,000. Here is the same repair with the cover and without it.

On the standard plan the age amount comes off part by part. In this repair the plastic bumper and the lamp units lose 50% of their cost, the metal wing loses 15% for a car in its third year, and the labour loses nothing. Those amounts come to ₹8,000 before your deductible is even counted.

Amounts shown are an example. What you actually pay depends on your car, the damage and the plan you hold.

On a single ₹50,000 repair, Zero Depreciation cover keeps about ₹8,000 in your pocket. The share taken off metal parts rises every year, so the same repair saves more as the car gets older within its first 5 years.

Your personal Claims Specialist is assigned once your claim is registered, not when the policy is issued. From that point one person owns the claim from the first call to the last rupee, so you never have to repeat your case to the customer support helpline. Tell them you hold Zero Depreciation cover when you report the damage. They check it against your policy document and show you what it pays on this claim.

Two things stay outside the cover at every claim. Your deductible is set by the Insurance Regulatory and Development Authority of India (IRDAI) and stays yours to pay. And your No Claim Bonus (NCB) is decided at the renewal after the claim rather than at the claim itself, which is where Kiwi Insurance Super NCB does its work.

Where the car is repaired

Zero Depreciation cover applies the same way wherever the repair happens. What changes between a Kiwi cashless garage and a garage you find yourself is how the money moves, not how much of it you get.

Who pays what on a replaced part

Zero Depreciation cover does not pay for the whole part on its own, and it does not arrive as a separate payment. Your Own Damage cover pays what the part is worth today, and Zero Depreciation cover pays the amount that would otherwise have been taken off for its age. Between the two, the full cost of the part is covered. You see one payout, not two, and one amount left to pay.

The amounts a standard plan takes off follow the schedule set by the Insurance Regulatory and Development Authority of India (IRDAI). The claim limit is written into the policy document, so check the one that applies to yours.

There is no waiting period. Zero Depreciation cover works from the day your policy starts. A dent on day 2 is treated the same as a dent in month 11.

Premium ranges are indicative and run from a small car to a large car in a large city, before Goods and Services Tax (GST). What you actually pay depends on your car's Insured Declared Value (IDV), its age and your insurer. Prices for the same cover differ between insurers.

Can they all be held on one policy?

Yes. Zero Depreciation cover, Engine Protect cover and Return to Invoice cover can all be held on the same policy, and taking one does not rule out another. There is no limit on how many optional covers a single policy can carry. They do not overlap either, because each one is written for a different gap, so you are not paying twice for the same thing.

Zero Depreciation cover lowers what a repair claim costs you. What it does not do is pay for everything, and its own limits are worth knowing plainly before you add it.

The cover is written to remove one deduction, the amount taken off replaced parts for their age. Outside that gap it does nothing at all. It does not clear away the things your policy already leaves out, and it does not make a claim payable that your policy would otherwise turn down. Some optional covers do add cover the base plan never had, such as Engine Protect cover for engine damage from water, but Zero Depreciation cover is not one of them.

Things to know before you add it

• It attaches only at purchase or renewal. You cannot add it part way through a policy year, so a cover skipped now cannot be added after a dent next month
• It carries a yearly claim limit. Kiwi Insurance allows [number] Zero Depreciation claims a year. After that, the age amount comes back on replaced parts for the rest of the policy year
• It does not remove your deductible. The fixed part of every claim stays yours to pay
• It does not pay for consumables. Engine oil, coolant, nuts and bolts stay off the payout unless you also hold Consumables cover
• Tyres and tubes, and batteries, keep their own deduction, so these parts are paid with an amount taken off even while every other part is paid in full
• It does not change a total loss or theft payout. Those are paid at the Insured Declared Value (IDV), and Return to Invoice cover is the cover that lifts the amount
• It does not pay for damage that was already there. Dents, scratches or cracks on the car before the cover began stay yours to fix. When you buy a policy after a break in cover, the insurer usually inspects the car first and notes the damage it finds, and a later claim for that damage is turned down
• It does not pay for a part that is simply old. A part is replaced under a claim because an accident damaged it, not because it has done its years
• It usually ends when the car turns 5 years old. Most insurers do not offer it on older cars, and those that do tend to charge a higher rate for it
• It does not rescue an invalid claim. Driving without a valid licence or under the influence means the claim is turned down, and no cover changes that

Who decides a borderline case? If it is not clear whether damage falls under this cover or another one, Kiwi decides it against the policy document, and your personal Claims Specialist tells you which cover is paying and why. If you do not agree with the answer, raise a grievance, which is a formal complaint the insurer must answer. If you are still not satisfied, take it to the Bima Bharosa portal run by the Insurance Regulatory and Development Authority of India (IRDAI), and after that to the Insurance Ombudsman.

Adding it at renewal

Renewal runs the same 6 steps with 2 differences. Your car is a year older, so the price of the cover may change, and your No Claim Bonus (NCB) is already built up and carries into the new premium. Renew before the policy runs out and you keep both the cover and the bonus without a break.

Renewing from another insurer? Your optional covers do not carry across on their own. Choose Zero Depreciation cover again on the new policy, and bring your No Claim Bonus (NCB) certificate. The bonus comes with you as long as your old policy is renewed within 90 days of its expiry. After that it is lost.

A change made part way through a policy year is called an endorsement. The rules for endorsements come from the India Motor Tariff (IMT). Read how IMT endorsements work.

Most insurers sell a Zero Depreciation cover. What differs is what comes with it: how the claim it was bought for actually runs, and what the insurer adds that nobody else does.

And what comes with every plan, at no extra cost

Kiwi PayFirst, Kiwi Insurance Flexi Repair and Kiwi InstaCash are optional covers too. Right now Kiwi includes them at no extra cost, so there is nothing more to pay for them.