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Zero depreciation car insurance is a type of add-on cover that ensures that you receive the full sum insured at the time of claiming your car insurance. Depreciation in motor insurance often refers to the loss in value of an asset over time due to factors such as age, wear and tear, and obsolescence.However, with our nil depreciation cover, you receive the claim amount without the depreciation deduction, giving you the benefit of full coverage. Here is a comprehensive guide detailing zero depreciation insurance, its features, inclusions, and benefits. Read on to learn more.
Zero Depreciation in car insurance, also known as bumper-to-bumper or nil depreciation cover, is an add-on policy that ensures the policyholder receives the full claim amount without any deduction for depreciation on replaced parts. It is available with our standalone own-damage and comprehensive car insurance policies.Zero depreciation means that when you claim your insurance, you receive the entire claim amount from the sum insured for the repair or replacement costs of car parts. Normally, when you file a claim for damages, the insurer deducts a certain percentage based on the depreciation of the car parts, especially those made of plastic, rubber and metal. With this add-on, the deduction is waived off, allowing you to get a higher reimbursement.This add-on is particularly beneficial for new car owners or those with high-end vehicles, as it offers more comprehensive financial protection. However, it is important to note that this cover typically comes with a higher premium and might not cover all types of damages, like general wear and tear. It is ideal for those seeking to minimise out-of-pocket expenses in case of a claim.
Depreciation refers to the deduction of the value of the asset over time due to wear and tear, ageing or usage. Vehicles, in general, are depreciating assets. For example, a new car will cost more than an older one.Similarly, there is a certain depreciation associated with all the parts the car is made of. Parts made of plastic, metal, and fibre typically lose value over time, and each part has a different rate of depreciation.This directly affects the car insurance premiums and claim amount, as insurers consider this amount and only pay for the replaced parts after deducting the depreciation amount from the claim amount. The insured person has to pay for the difference between the market value of the new part and the depreciated part of the car.As a result, you receive less coverage and pay for the expenses of repair of such parts in case of an accident.
As per the IRDAI, these are depreciation rates for various parts of the vehicle:
Rate of depreciation for all other parts, including wooden parts:
According to the Insurance Regulatory and Development Authority of India (IRDAI), the rate of depreciation in car insurance is calculated as follows:
During claim settlement, zero dep insurance plays a crucial role by ensuring that you receive almost 100% of the claim amount for the repair in case of accidental damage. Let us consider the following example to understand the role of zero depreciation add-on in car insurance:Let us assume that your 2-year-old car incurs damage due to a collision and requires the replacement of some parts of your vehicle. The estimate received from the garage is ₹50,000.If you have our comprehensive car insurance but without the zero depreciation add-on cover, this is the depreciation rate applied:
This means you will receive the claim amount against the total expense after deducting ₹13,000 from the total amount. The difference between the total expense and the claim amount will have to be borne by you.However, with our nil depreciation cover, we pay the entire ₹50,000 without any deductions for depreciation.
Our nil depreciation cover ensures that you receive almost 100% of the claim amount without the deductions for depreciation. This means that you receive the total cost of the repair or replacement, providing better coverage and cost-efficiency.
Our add-on feature is particularly beneficial for those who own a new, expensive or luxury car. Since the cost of replacement or repair of such cars is higher, with zero depreciation cover, you can be assured that the costs are fully covered.
With our nil depreciation car insurance, you can significantly reduce the amount you pay to cover the difference between the repair costs and the claim amount. As you do not have to bear the depreciation costs, you receive adequate coverage and make the best out of your car insurance.
Your car insurance and the add-ons maintained can testify to your car’s ideal maintenance and good condition. Knowing that your car is well protected can, therefore, enhance its resale value.
With our add-on cover, you can be assured of complete peace of mind. Knowing that Reliance General Insurance offers the best financial protection in case of any mishap or accident, you can enjoy any ride with peace of mind.
Zero depreciation car insurance is ideal for a specific group of car owners who seek comprehensive coverage and overall financial protection. Buying our nil depreciation car insurance can prove to be beneficial to:
Owners of new vehicles should strongly consider our nil depreciation cover. New cars depreciate quickly, and having this cover ensures that the car's value is protected.
For owners of luxury and high-end cars, the repair or replacement costs can be significantly higher. Our nil depreciation cover provides the necessary financial protection to ensure that high-value parts are fully covered, minimising out-of-pocket expenses.
Drivers who frequently use their vehicle for daily commutes or those who have recently started driving can rely on our nil depreciation insurance. In such cases, the risk of accidents or damage is higher, making our nil depreciation cover essential for financial security.
People living in high-risk or accident-prone zones are more likely to incur unavoidable damages to their cars. In such cases, our add-on can benefit by providing full coverage and maximum financial protection.
If you wish to minimise the smallest risks and worry about small bumps and dents on your car, this add-on can help secure maximum coverage.
Also Read: Types of Car Insurance Covers
Our nil depreciation cover premium depends on three main factors:
Since the age of your car also increases the depreciated value of certain parts, it is a major factor governing the insurance policy cost. Thus, the older the car, the higher the premium.
The type of car is also one of the most important factors in determining the cost of car insurance. If you own a luxury car, the insurance cost will be higher as the repair or replacement costs of damaged parts will be higher than for a hatchback or SUV. Thus, the make and model of your car are considered while determining the cost.
Your car insurance costs change with different geographical locations. For instance, if you live in a disaster-prone or humid area, the chances of catching rust or damage to parts of your vehicle are high. In such cases, the insurance cost will be higher than usual.
Our car insurance nil depreciation cover is applicable to cars under the age limit of 3 years. So, in other words, only new cars are eligible for 0 depreciation car insurance.
As compared to a regular car insurance policy, zero depreciation car insurance will be slightly more expensive in terms of premium.While the slight increase in the premium offers significant benefits when making an insurance claim, it is still important to consider the increase before buying the add-on.
Under our nil depreciation cover, you can make only two claims in a policy year. This is to prevent customers from making claims about every small dent in their car. Thus, ensure that this fits your coverage requirements and that you are aware of the limit set before opting for it.
We clearly state the terms and conditions applicable to the insurance policy. It is important to be thorough, as violations of these terms can result in claim rejections.
Choosing the right insurance partner is equally important to make the most of your car insurance premium and receive full coverage. With Reliance General Insurance, you get the following features, which enhance your policy's coverage and truly provide peace of mind.
We offer 24/7 customer support to help you with your claims and swift buying process. You can reach us via our helpline number, email address, or contact our branch.
Our insurance policies with zero dep insurance provide enhanced coverage, ensuring that we cover the entire depreciated value. This reduces your out-of-pocket expenses and enhances your coverage, including damage repair costs for luxury cars.
With us, your nil depreciation covers are settled quicker with high settlement rates. This makes it convenient for you to restore your beloved vehicle to be as good as new.
We cover most of your vehicle’s parts, including fibreglass, bumpers, metallic, and plastic parts. The only parts excluded from the policy are the engine, tyres, and glass.
We offer an easy and quick online buying and renewal process that eliminates the hassle of complex paperwork, saving you time and effort.
With a record of 100% claim settlement ratio for FY 2023-24, we offer an easy video claim process to ensure a quick and transparent process.
The advantages of zero depreciation car insurance make it a valuable addition to your policy coverage. It provides enhanced financial protection by reducing the liability of bearing the extra cost due to depreciation deductions.With Reliance General Insurance, you can swiftly buy or renew comprehensive car insurance or standalone own-damage insurance with the nil depreciation cover and benefit from the enhanced coverage.
With time, your car parts are subjected to depreciation, which is accounted for by the insurance company and reduced when claiming the insurance. Zero depreciation plans increase the coverage amount by eliminating the depreciation rates from the claim amount.
Yes, these two terms are used interchangeably by the insurance companies, but they mean the same.
With us, you can insure your vehicle with a nil depreciation cover until it is three years old.
Yes, the nil depreciation cover can be easily transferred to a new car owner while transferring the base policy. However, the registration number must remain the same.
We offer a No-Claim Bonus discount ranging from 20%-50% to those who do not claim their insurance during the policy year. Thus, regardless of your policy type, if you are eligible to claim this discount, it will apply to your insurance.
IDV, or Insured Declared Value, is the maximum amount you receive when you claim your car insurance. If you have car insurance with nil depreciation, then your IDV will be higher than the standard insurance, as there will be no deduction for depreciated parts.
No, our add-on cover is available for cars that are a maximum of 3 years old. We do not provide zero dep insurance after 5 years.
To find out if your insurance covers nil depreciation, review your policy documents and inclusions. You can also contact our customer support team via our helpline number, +91 22 48903009, or write to us at rgicl.services@relianceada.com.
The zero depreciation cover is most beneficial for a new car and is thus applicable to cars less than five years old.
With us, you can claim nil depreciation cover for a maximum of two times per policy year.
Yes, you can add zero dep insurance to your existing car insurance plan while renewing it. However, this add-on is applicable only if you own our standalone own-damage or comprehensive insurance plan. If you own third-party insurance, you will not be eligible for this add-on.
Disclaimer: T&C apply. The information mentioned on this page is only an indication of the coverages/benefits offered by Nil Depreciation for Private Car UIN No. IRDAN103RP0010V02100001/A0003V01200910; Nil Depreciation for Private Car- Bundled, UIN: IRDAN103RP0007V01201819/A0030V01201819; Nil Depreciation for Private Car for Motor Secure Plus and Motor Secure Premium- Own Damage, UIN: IRDAN103RP0001V01201920/A0013V01201920. Please read the policy wordings, brochure, and prospectus before concluding a sale.
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