What is zero-depreciation (nil-dep) cover?

Zero-depreciation, or nil depreciation, is a motor add-on that stops the insurer deducting depreciation on parts replaced in a partial-loss claim. Without it, one insurer's standard wording deducts a percentage on items such as rubber and plastic parts, tyres and batteries, and on other parts by the vehicle's age. The add-on applies only if your schedule lists it, and it can be limited to a set number of claims.

In a standard private car policy, a partial loss is paid at the actual and reasonable cost of repair or replacement, subject to depreciation on the parts replaced. One insurer's wording deducts 50% on rubber, nylon and plastic parts, tyres, tubes, batteries and airbags, 30% on fibreglass and nothing on glass; all other parts, including wooden parts, follow a schedule that rises with the vehicle's age.^[1]

What the add-on changes

The same insurer's nil depreciation add-on says that, for an admissible partial-loss claim, no depreciation is deducted for replaced parts including tyres, tubes and rubber or plastic parts — for the specified number of times mentioned in the policy schedule.^[2]

Limits to look for

• Number of claims: The add-on may pay only for a set number of claims in the policy period; the number is in your schedule.^[2]
• Partial loss only: It works on partial-loss claims. A total loss is settled on the IDV, less the value of the wreck.^{[2, 1]}
• Eligibility: Who can buy the add-on, and for which vehicles, is a product term; check before you renew.
• Consumables: In one insurer's list of add-ons, consumables such as nuts, bolts, oils and filters are a separate cover from nil depreciation.^[2]

If depreciation was deducted despite the add-on

1. 1

   Check the schedule

   Confirm the add-on is listed for the policy period in which the loss happened, and how many claims it allows.

2. 2

   Count earlier claims

   If you have claimed before in the same period, check whether the allowed number had already been used.

3. 3

   Ask for the assessment and complain in writing

   Ask the insurer for the surveyor's assessment and its computation. If the deduction stands, write to its grievance officer; it should resolve your complaint within 14 days, with reasons if it does not accept it.^[3]

4. 4

   Read about depreciation disputes

   Why depreciation was deducted covers claims without the add-on.

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

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