Zero depreciation (zero-dep or nil-dep) is an add-on to a comprehensive car insurance policy that removes the depreciation deduction on parts replaced during a claim. Without it, IRDAI's standard depreciation schedule means you pay a significant fraction of every repair from your own pocket — especially for plastic, rubber and glass parts. Zero-dep eliminates this deduction, so the insurer pays the full cost of replacement parts. It typically adds 15–25% to the OD premium and is most valuable for new or near-new cars up to 5 years old.
Zero depreciation: what changes at claim time
| Part category | Standard depreciation (example: 3-yr car) | With zero-dep |
|---|---|---|
| Plastic parts (bumpers, dashboards) | 50% depreciation deducted | Full replacement cost paid |
| Rubber / nylon parts (seals, tyres) | 50% depreciation deducted | Full replacement cost paid |
| Fibre glass parts | 30% depreciation deducted | Full replacement cost paid |
| Metal parts | 0–5% depreciation (IRDAI schedule) | Same — minimal difference |
| Glass (windscreen) | No depreciation under standard | Same |
| Compulsory deductible | Applies regardless | Still applies |
| Consumables (oil, coolant) | Not covered under zero-dep | Needs separate consumables add-on |
What depreciation deduction actually means in a claim
Standard comprehensive insurance settles parts replacement claims after deducting depreciation per IRDAI's schedule. For a three-year-old car, plastic and rubber parts are depreciated at 50%. This means if your bumper costs ₹15,000 to replace, the insurer pays ₹7,500 and you pay the rest — out of pocket, in addition to your deductible.
In a significant accident involving multiple plastic and rubber components, this depreciation deduction can amount to ₹30,000–₹80,000 or more on a mid-range car. Zero depreciation eliminates this gap entirely for covered parts, making the insurer's payout much closer to the actual repair bill.
How IRDAI's depreciation schedule works
IRDAI mandates specific depreciation rates for different materials and vehicle ages. The rates that matter most under zero-dep are:
- Plastic, nylon, rubber, tyres, tubes, batteries: 50% from day one (regardless of vehicle age for these materials)
- Fibre glass: 30%
- Metal parts: Age-based (0% for under 6 months; rises with age)
- Glass: No depreciation (windscreen, windows)
Because plastic is used extensively in modern car bodies (bumpers, interior trim, sensors, housings), the practical impact of depreciation in a real-world accident is significant — often the difference between a manageable and a painful out-of-pocket payment.
What zero-dep does and does not cover
Zero-dep is frequently misunderstood — partly because the name implies complete coverage, which it does not provide. What zero-dep covers and what it does not:
- Covers: replacement cost of plastic, rubber, fibre and other depreciable parts without deducting depreciation.
- Does not cover: compulsory deductible (₹1,000 or ₹2,000 depending on engine size) — this always applies.
- Does not cover: consumables (oil, coolant, brake fluid) unless you separately add a consumables cover add-on.
- Does not cover: tyres and tubes in most standard zero-dep policies — check the policy wording.
- Does not cover: engine damage from water ingress — requires a separate engine protect add-on.
- Limits claims frequency: most zero-dep policies allow only 1–2 nil-depreciation claims per year; additional claims settle with standard depreciation deductions.
Zero-dep works best when combined with: engine protect (covers engine damage from water or oil leakage), consumables cover (small but frequent out-of-pocket costs on every repair), and return to invoice (if the car is a total loss, pays the original invoice value rather than the depreciated IDV). These four add-ons together provide near-comprehensive settlement on most real-world accident scenarios.
How much zero-dep costs
Zero-dep typically adds 15–25% to the own-damage premium. For a mid-range car (₹8–12 lakh ex-showroom) in its second or third year, this might translate to an additional ₹2,000–₹4,500 per year. In absolute terms, one avoided depreciation deduction on a bumper or bonnet repair will typically recover the add-on cost.
The add-on cost scales with the car's IDV — more expensive cars with higher IDVs pay more for zero-dep, but also have more to lose from depreciation deductions on large repairs.
When zero-dep is worth it — and when it is not
| Situation | Zero-dep recommendation |
|---|---|
| New car (under 1 year) | Strongly recommended — parts are at full value, deductions are steep |
| 1–3 years old | Recommended — major benefit on plastic-heavy repairs |
| 3–5 years old | Usually still worthwhile; evaluate cost vs. benefit |
| 5+ years old | Diminishing returns as IDV falls; may not be cost-effective |
| EV (any age) | Strongly recommended — proprietary parts are expensive |
| Luxury / high-end car | Strongly recommended regardless of age |
| Old budget car with low IDV | May be unnecessary — compare add-on cost to potential saving |
Frequently asked questions
Does zero depreciation cover include tyres?
How many zero-dep claims can I make per year?
Can I add zero-dep to an existing policy mid-term?
Is zero-dep available for cars older than 5 years?
Does zero-dep affect my NCB?
Sources & further reading
Figures, prices and policy details were current at the last-updated date above. Automotive pricing, incentives and regulations change frequently — verify time-sensitive details with the linked primary sources. Read our editorial policy and fact-checking standards.
