Kalicharan, New Delhi.

: Dev Kashyap
Updated Mon, 11 Apr 2022 0559 AM IST

The IDV (Insured Declared Value) of the car decreases with age. If the zero depreciation cover is not taken, the entire cost of installing new parts is not borne by the insurance company. You have to pay some amount yourself.

On buying a new car, insurance is available from the company for one year. When you renew car insurance after one year, then definitely take zero depreciation cover with it. It not only protects you from third party liability in the event of an accident but also indemnifies the damage caused to the car by natural calamities like flood, hailstorm, storm, earthquake and rock slide. Also covers damages caused by riots and other man-made calamities. Nowadays, auto insurance companies definitely offer zero-depreciation cover while buying car insurance.

This is how the value of vehicles decreases

age of vehicle depreciation rate
up to six months 00
six months to one year 5 percent
one year to two years 10 percent
two years to three years 15 percent
three years to four years 25 percent
four years to five years 35%
five years to 10 years 40 percent
more than 10 years 50 Cent

These parts are also affected

  • 50% on rubber/nylon/plastic parts, tubes, batteries, paint work and airbags installed in your car.
  • There is 30% depreciation on fiberglass components.
  • It does not affect the parts of vehicles made of glass.
understand math like this

Suppose, in an accident, the fiberglass parts in your car get damaged, which costs Rs 20,000 to replace. In case of normal car insurance, the insurance company will pay only Rs 14,000. You will have to pay the remaining Rs 6,000 from your own pocket. Whereas, in case of zero depreciation cover, the insurance company will bear the entire cost of replacement of parts.

What is zero depreciation
The IDV (Insured Declared Value) of the car decreases with age. If the zero depreciation cover is not taken, the entire cost of installing new parts is not borne by the insurance company. You have to pay some amount yourself. Conversely, if you get a zero depreciation cover if your car is damaged in an accident, the insurance company pays the entire claim amount.

Cars up to 7 years old only covered
The zero depreciation cover is for cars that are up to 5-7 years old. If you live in an accident prone area then you should take zero depreciation cover. This is a must for new drivers, new car owners and luxury car owners as well. If the cost of car spare parts is very high, then definitely take this cover. It protects you from financial loss. -TA Ramalingam, Chief Technology Officer, Bajaj Allianz

On buying a new car, insurance is available from the company for one year. When you renew car insurance after one year, then definitely take zero depreciation cover with it. It not only protects you from third party liability in the event of an accident but also indemnifies the damage caused to the car by natural calamities like flood, hailstorm, storm, earthquake and rock slide. Also covers damages caused by riots and other man-made calamities. Nowadays, auto insurance companies definitely offer zero-depreciation cover while buying car insurance.

This is how the value of vehicles decreases

age of vehicle depreciation rate
up to six months 00
six months to one year 5 percent
one year to two years 10 percent
two years to three years 15 percent
three years to four years 25 percent
four years to five years 35%
five years to 10 years 40 percent
more than 10 years 50 Cent

These parts are also affected

  • 50% on rubber/nylon/plastic parts, tubes, batteries, paint work and airbags installed in your car.
  • There is 30% depreciation on fiberglass components.
  • It does not affect the parts of vehicles made of glass.

understand math like this

Suppose, in an accident, the fiberglass parts in your car get damaged, which costs Rs 20,000 to replace. In case of normal car insurance, the insurance company will pay only Rs 14,000. You will have to pay the remaining Rs 6,000 from your own pocket. Whereas, in case of zero depreciation cover, the insurance company will bear the entire cost of replacement of parts.

What is zero depreciation

The IDV (Insured Declared Value) of the car decreases with age. If the zero depreciation cover is not taken, the entire cost of installing new parts is not borne by the insurance company. You have to pay some amount yourself. Conversely, if you get a zero depreciation cover if your car is damaged in an accident, the insurance company pays the entire claim amount.

Cars up to 7 years old only covered

The zero depreciation cover is for cars that are up to 5-7 years old. If you live in an accident prone area then you should take zero depreciation cover. This is a must for new drivers, new car owners and luxury car owners as well. If the cost of car spare parts is very high, then definitely take this cover. It protects you from financial loss. -TA Ramalingam, Chief Technology Officer, Bajaj Allianz

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