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Difference between Zero-Depreciation and Comprehensive Car insurance

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Having a car insurance policy helps take care of your financial expenses in case of a car accident, theft, etc. A fair majority of car owners are also aware of the fact that they need to buy third-party car insurance as it is compulsory in the country. What makes it perplexing is to choose between the car insurance types available at hand i.e. Zero-Depreciation and Comprehensive car insurance.

If you are amongst those who are confused as to which car insurance policy to choose because you have little or no knowledge of it, here are some quick facts that can help you decide:

Comprehensive Insurance

A comprehensive car insurance policy covers damage and loss to the vehicle in the event of fire, accident, vandalism, falling objects, theft, etc. In addition to this, this policy cover comes with third party insurance apart from the own damage cover it provides. Moreover, a comprehensive policy has different add-on options which provide room for widening the coverage. For this to happen, you need to pay extra premium.

This policy also covers all the risks that come under Motor Vehicles Act, and the damage and loss to the vehicle in case of:

  • Cyclones, typhoon, storm, hurricane, flood
  • Burglary, riots, theft
  • Malicious acts and terrorism
  • Theft, fire, and accident
  • Earthquake
  • Transit by rail, road, air, elevator, etc.
  • Self-ignition or explosion

Zero Depreciation Insurance

Zero depreciation cover is a type of add-one insurance cover that doesn’t take depreciation into account. This cover is also known as bumper-to-bumper cover. The prime benefit of this cover is to safeguard the car owner from the depreciation factor that occurs due to regular wear and tear which impacts the claim settlement value. This cover came into force in our country in the year 2009. Since then, it has become famous among car insurance buyers, benefitting them in one way or the other. This car insurance cover comes with a limit on the number of claims you file.

Key differences between Zero-Depreciation and Comprehensive car insurance

Claim Settlement

This is one of the major differences between the two types of car insurance in India. As mentioned before, zero depreciation does not consider the rate of depreciation. On the other hand, as far a comprehensive car insurance policy is concerned, it is only offered after taking into account the current vehicle value that is based on its year-on-year rate of depreciation.


Owing to the coverage being more extensive, zero depreciation insurance has a higher premium than comprehensive car insurance.

Plastic parts and repairs

When it comes to plastic parts and repairs, zero depreciation cover takes care of every repair cost involved in it. However, in comprehensive car insurance, the policyholder has to pay from his/her pocket depending on the coverage limit defined within the car insurance policy.

Car age

Comprehensive insurance is available for older cars as well, as compared to zero depreciation insurance covers which are available for cars up to 5 years in age*.

*This prescribed age limit of a passenger car for zero-depreciation cover can vary from insurer to insurer

Which car insurance type should you buy?

You should most certainly avail zero depreciation cover when you do not want to worry about depreciation. It is ideal for those people who do not want to incur repair costs because of depreciation while making an insurance claim.

Both these types of motor insurance i.e. comprehensive insurance and zero depreciation insurance come with their own set of advantages and disadvantages. As a car owner, you need to decide which one to avail. Before choosing, you must completely understand the two of them. To make an informed decision, make it a point to read the policy exclusions and coverage.

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