If you've ever filed a car insurance claim and been surprised by how little you actually received, depreciation is likely the culprit. Zero depreciation cover — also called "nil dep" or "bumper to bumper" insurance — is one of the most valuable add-ons you can buy. But it's also one of the most misunderstood.
What Is Zero Depreciation Cover?
When your car is repaired after an accident, the insurer doesn't pay for the full cost of replacement parts. They apply a depreciation rate based on the age of the part — or the car — and only pay the depreciated value.
For example, if a bumper that costs ₹15,000 to replace has depreciated by 40%, the insurer pays ₹9,000. You pay the remaining ₹6,000 out of pocket.
With zero depreciation cover, this deduction disappears. The insurer pays the full ₹15,000.
Key point: Standard comprehensive car insurance always applies depreciation. Zero dep is an add-on that removes this deduction entirely.
How It Changes Your Claim Settlement
Here's a real comparison. Imagine your 2-year-old car needs front-end repairs after an accident, and the workshop bill is ₹40,000.
| Component | Without Zero Dep | With Zero Dep |
|---|---|---|
| Metal parts (depreciation ~0%) | ₹8,000 | ₹8,000 |
| Plastic parts (depreciation 25%) | ₹9,000 paid on ₹12,000 | ₹12,000 |
| Rubber/nylon parts (depreciation 50%) | ₹5,000 paid on ₹10,000 | ₹10,000 |
| Fibre parts (depreciation 30%) | ₹5,600 paid on ₹8,000 | ₹8,000 |
| You receive | ₹27,600 | ₹38,000 |
| You pay out of pocket | ₹12,400 | ₹2,000 (compulsory deductible only) |
The difference in this single claim: ₹10,400. Most zero dep add-ons cost less than ₹3,000–₹5,000 per year. One moderate repair pays for several years of the add-on.
When It's Worth It — and When It's Not
Zero dep is worth buying if:
- Your car is less than 5 years old
- Your car has a lot of plastic components (most modern cars do)
- You drive in a city with heavy traffic, narrow lanes, or difficult parking
- Your car's IDV (Insured Declared Value) is above ₹5 lakh
- You've made claims in the past — the more you claim, the more it saves
Zero dep may not be worth buying if:
- Your car is older than 7–8 years (premium becomes expensive relative to benefit)
- Your car has a very low IDV
- You barely drive or park in very safe environments
- You've never made a claim and plan to protect your NCB strictly
Watch out: Most insurers limit zero dep claims to 2 per policy year. If you're a high-frequency claimant, this cap matters.
How Much Does Zero Dep Cost?
The cost varies by car model, age, and insurer — but here's a rough guide:
- Hatchbacks (e.g. Swift, i20): ₹1,500–₹2,500/year
- Sedans (e.g. City, Verna): ₹2,000–₹3,500/year
- SUVs (e.g. Creta, Seltos): ₹3,000–₹6,000/year
- Premium cars: ₹6,000–₹12,000+/year
These are add-on premiums on top of your base comprehensive policy. Given that a single moderate claim can save ₹8,000–₹20,000, the math usually works out strongly in favour of buying it.
The Kavach Verdict
For any car under 6 years old, zero depreciation cover is almost always worth it. The premium is small relative to the protection it provides, and a single real-world claim will typically recover the cost of several years of add-on premiums.
That said, the right answer depends on your car's age, how and where you drive, and what the add-on costs from your specific insurer. At Kavach, we review these numbers for each customer before recommending whether to include it — rather than pushing it as a blanket upsell.
If you're not sure whether your current policy has zero dep, or whether it makes sense for your car, that's exactly the kind of question we answer in a free consultation.
Not sure what's right for you?
Book a free 30-minute call with a Kavach advisor. No jargon, no pressure — just honest guidance.