Zero Depreciation Cover – Is It Worth It?
When selling motor insurance, one question customers often ask is: “Should I take Zero Depreciation Cover?” As an insurance professional, your answer can turn a basic sale into a value-driven relationship. Let’s break it down in simple terms.
🔎 What is Zero Depreciation Cover?
Normally, when a claim is made for repairs or replacement of parts, the insurer deducts depreciation—the loss of value due to wear and tear of parts. Customers end up paying part of the repair cost out of pocket.
A Zero Depreciation Cover (also called Bumper-to-Bumper cover) ensures that the full cost of replaced parts is paid by the insurer—without any depreciation cuts.
📊 Example: With & Without Zero Dep
Imagine:
Your car meets with a minor accident.
The bumper and headlight assembly need replacement.
Total replacement cost: ₹25,000.
Without Zero Dep Cover:
Depreciation on plastic parts: 50%.
Depreciation on metal parts: 30%.
Insurer pays: ~₹15,000.
Customer pays out of pocket: ₹10,000.
With Zero Dep Cover:
Insurer pays full ₹25,000.
Customer pays: ₹0 (except deductible).
👉 That’s a saving of ₹10,000 in one claim—often more than the cost of the add-on itself.
🛠️ Key Features of Zero Depreciation Cover
Covers full repair/replacement costs of plastic, metal, and fiber parts.
Usually available for cars up to 5 years old (some insurers extend this).
Can be opted with both new and renewal policies.
Premium is higher, but benefits outweigh costs for most customers.
❌ What It Doesn’t Cover
Normal wear and tear.
Tyres and tubes (unless damaged in accident, subject to partial coverage).
Mechanical/electrical breakdowns not related to accidents.
Damage when driving without valid license or under intoxication.
💡 Who Should Definitely Take It?
New Car Owners – Expensive parts make repair bills heavy.
Luxury Car Owners – High-cost spares mean big out-of-pocket expenses without zero dep.
First-Time Drivers – Higher risk of minor accidents.
Urban Drivers – City traffic = more chances of small damages.
✅ Conclusion: Worth It?
Yes—Zero Depreciation Cover is absolutely worth it for most customers, especially within the first 5 years of owning a car. It removes surprises at the workshop and ensures customers get the maximum claim benefit.
👉 As a sales pitch: “Without Zero Dep, you’ll share repair bills. With Zero Dep, your insurer pays almost everything. For a small extra premium, isn’t that total peace of mind?”