Zero depreciation car insurance, also known as bumper-to-bumper cover, protects you from depreciation deductions on your car parts during claim settlement. This means you receive the full cost of replaced or repaired parts without any deduction for wear and tear. However, after your car crosses the 5-year mark, most insurers stop offering this add-on due to lower vehicle value and increased repair risk. Knowing what happens after 5 years and reviewing your options will help you choose the right plan at renewal.
What Is Zero Depreciation Car Insurance Cover?
Zero depreciation cover is an add-on to your comprehensive car insurance policy that removes depreciation deductions on replaced parts during a claim. Typically, insurers calculate claim amounts based on the Insured Declared Value (IDV) of your car, which decreases every year. Without this cover, depreciation also applies to parts such as bumpers-to-bumpers , headlights, and engine components.
For example, if your car is three years old, insurers may deduct 30% to 40% depreciation on certain parts, reducing your claim payout. With zero depreciation cover, the insurer pays the full cost of parts without any deduction, which lowers your out-of-pocket expense. This cover is especially helpful for new or relatively new cars, where replacement costs are high and depreciation has a big impact on the claim amount.
Can Zero Depreciation Cover Be Continued After Your Car Is Over 5 Years Old?
Most insurers in India offer zero depreciation cover for cars up to 5 years old. After this period, the IDV drops sharply and the chance of major repairs goes up. Insurers usually stop offering zero depreciation cover beyond 5 years or offer it with restrictions, higher premiums, and a mandatory vehicle inspection.
When zero depreciation cover is not available, claim settlements follow standard depreciation rates as practised by insurers under the Indian Motor Tariff guidelines. The standard rates for cars older than 5 years are listed below.
Car Age (Years) | Depreciation on Non-metallic Parts | Depreciation on Metallic Parts |
More than 5 years up to 10 years | 50% | 40% |
More than 10 years | 50% | 50% |
How Do Insurers Handle Zero Depreciation Cover After 5 Years?
Insurers change their approach to risk assessment once a vehicle ages beyond five years. Here is what generally happens:
• Underwriting and Inspection: A detailed vehicle inspection is required to assess the car condition before approving zero depreciation cover beyond 5 years.
• Higher Premiums: Insurers charge significantly higher premiums for zero depreciation cover on older cars due to higher claim risk and lower IDV.
• Restricted Availability: Some insurers offer zero depreciation extension only for select car models or under special terms such as capped claim count or compulsory inspection.
• Alternative Add-Ons: Insurers often suggest add-ons such as engine protection, roadside assistance, or return to invoice cover for older cars.
Comparison of Zero Depreciation Cover and Alternatives After 5 Years
Comparing the available car insurance add-on covers helps you understand the protection levels for older vehicles.
Add-on Cover | What It Does | Key Benefit | Limitation |
Zero Depreciation Cover | Full claim settlement without depreciation deduction | Full cost coverage of damaged parts | Usually not available, or costly, after 5 years |
Engine Protection Cover | Covers engine and gearbox repairs | Protects against costly engine repairs | Does not cover body parts |
Return to Invoice Cover | Pays the invoice value in case of total loss or theft | Higher payout on total loss | Higher premium, applicable only for total loss |
Roadside Assistance | Emergency services such as towing, fuel delivery, jump start | Convenience and on-road safety | Does not affect claim settlement |
Effect of Zero Depreciation Cover on No Claim Bonus and Claim Settlement
Adding specific covers to your car insurance policy affects your long-term benefits and the total cost of ownership.
• Effect on No Claim Bonus (NCB): Filing a claim under zero depreciation cover will reduce or reset your NCB, just like a regular claim.
• Lower Out-of-Pocket Expense: Zero depreciation cover reduces your immediate repair costs, but it adds about 15% to 20% to your premium.
• GST Applicability: This add-on attracts GST at 18%, which adds to the total cost, especially as the base premium goes up for older cars.
Practical Tips for Renewing Zero Depreciation Cover After 5 Years
Following these steps can help you secure the best possible coverage for an older vehicle.
• Evaluate Your Car's Condition and IDV: If the car is well-maintained and the IDV is reasonable, zero depreciation cover may still be cost-effective.
• Request a Vehicle Inspection: Some insurers require an inspection for approval. Ensure your car is in good condition to pass it.
• Compare Premiums: Get quotes from multiple insurers to find competitive rates.
• Consider Alternatives: If zero depreciation is expensive or unavailable, opt for Engine Protection or Return to Invoice cover.
• Discuss with Your Insurer: Share your claim history and maintenance records with your insurer to negotiate better terms.
Example: Claim Settlement With and Without Zero Depreciation Cover After 5 Years
Item | Without Zero Depreciation Cover | With Zero Depreciation Cover (If Available) |
Car age | 6 years | 6 years |
IDV | Rs. 4,00,000 | Rs. 4,00,000 |
Bumper repair cost claimed* | Rs. 25,000 | Rs. 25,000 |
Depreciation deducted | Rs. 12,500 (50% on non-metallic parts) | Rs. 0 |
Final claim payout | Rs. 12,500 | Rs. 25,000 |
Additional premium for zero depreciation cover | Not applicable | About 20% to 25% higher premium |
*Assumes the bumper is a non-metallic part. Depreciation rates vary by part material.
How to Buy or Renew Zero Depreciation Insurance for Your Car Beyond 5 Years
You can easily renew or purchase your policy online by following these simple steps.
Visit the Zurich Kotak General Insurance website or mobile app.
Enter your car registration and existing policy details.
Choose a comprehensive insurance plan that fits your needs.
Select the zero depreciation add-on from the list of available options.
Complete a vehicle inspection if requested by the insurer.
Pay the premium securely online.
Receive your policy confirmation instantly via email.
Get a Quote for Zero Depreciation Car Insurance
Conclusion
Zero depreciation car insurance protects you from high repair costs by covering the full price of replaced parts during a claim. While it is most common for the first five years, some insurers allow you to extend it further under specific conditions. By understanding depreciation rates and exploring alternatives like Engine Protection, you can keep your aging vehicle well-protected. Always check your car value and compare different plans before you decide. Explore Zurich Kotak Zero Depreciation Cover for transparent pricing, fast claim assistance, and a fully digital buying experience.
Frequently Asked Questions
Q. Can I Get Zero Depreciation Insurance Beyond 5 Years?
A. Yes, some insurers offer this cover beyond 5 years, but it usually depends on a vehicle inspection and a higher premium.
Q. Can I Buy Zero Depreciation Cover Mid-Term After 5 Years?
A. No, you generally cannot add this cover in the middle of a policy year. It must be added at the time of renewal.
Q. Does Zero Depreciation Cover Consumables Like Oil and Nuts?
A. No, this cover does not include consumables like oil, nuts, bolts, or brake pads. You need a separate Consumables Cover for these items.
Q. How Does Depreciation Affect Claims After 5 Years?
A. Without zero depreciation cover, the insurer deducts a percentage of the part value based on its age. This means you pay more out of pocket during a claim.
Q. Does Zero Depreciation Cover Affect My No Claim Bonus?
A. Yes, filing a claim under this cover will reduce or reset your No Claim Bonus, just like any other claim.
Q. Is Zero Depreciation Cover Worth It for Cars Older Than 5 Years?
A. It can be worth it if the additional premium is significantly lower than the potential cost of replacing expensive spare parts. Compare quotes and weigh your repair history before deciding.
Q. Can Zero Depreciation Cover Improve My Car Resale Value?
A. Zero depreciation cover does not directly impact resale value. However, claim records and the use of quality parts during repairs can support a higher resale price.
Q. Does Zero Depreciation Cover Transfer If I Sell My Car?
A. Zero depreciation cover is linked to the insured vehicle and policy. It typically does not transfer to a new owner unless the entire policy is transferred along with the vehicle sale.
Q. Should You Get Zero Depreciation Insurance?
A. You should consider zero depreciation insurance if you own a new or relatively new car, want to minimise out-of-pocket expenses during claims, and prefer full coverage for parts without depreciation deductions. For cars older than 5 years, compare the higher premium with the potential claim benefit before making a decision.
Q. Up to How Many Years Can You Take Zero Depreciation Car Insurance?
Most insurers in India provide zero depreciation cover up to 5 years from the car registration date. A few insurers may extend it up to 7 years or 8 years for cars in good condition, subject to inspection and a higher premium. Beyond 7 to 8 years, the cover is usually not available and you should consider other add-ons such as Engine Protection or Return to Invoice.
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