Car insurance helps you manage repair costs after an accident, but one factor that often surprises car owners is depreciation. Over time, car parts lose value due to wear and age. During a claim, insurers usually deduct depreciation from the cost of replaced parts. A zero depreciation add-on is designed to reduce this burden.

The HDFC ERGO Car Insurance Zero Depreciation add-on helps you get a higher claim amount by reducing or eliminating depreciation deductions on certain parts. This article explains how it works, its benefits, cost factors, and when it may be worth considering.

What is a Zero Depreciation Add-On?

A zero depreciation add-on is an optional cover that you can include with a comprehensive car insurance policy. With this add-on, depreciation on replaced car parts is either fully covered or significantly reduced during a claim.

Without this add-on, you would need to pay the depreciation amount from your own pocket when parts like plastic, rubber, or metal components are replaced. With zero depreciation cover, the insurer generally bears most of that cost, leading to a lower out-of-pocket expense.

How It Works

When your car is repaired after an accident, certain parts may need replacement. Normally, depreciation is applied to these parts based on their age and material.

With a zero depreciation add-on:

  • Depreciation on eligible parts is not deducted
  • Claim settlement amount is usually higher
  • You pay less during repairs

This can make a noticeable difference, especially for newer vehicles where repair costs are higher.

Key Benefits

Higher Claim Amount

You get a better claim settlement because depreciation deductions are reduced or removed for eligible parts.

Lower Out-of-Pocket Expenses

Since depreciation is covered, you pay less from your own pocket during repairs.

Better Financial Protection

It helps manage unexpected expenses after accidents or damage to the car.

Peace of Mind

Knowing that major repair costs are covered gives confidence while driving.

Cost of the Add-On

The cost of a zero depreciation add-on is slightly higher than a standard comprehensive policy. The premium depends on:

  • Age of the car
  • Model and variant
  • City of registration
  • Insured Declared Value (IDV)
  • Claim history

Although it increases the premium, many car owners find it valuable because it can reduce expenses during a claim.

When Should You Buy It?

A zero depreciation add-on may be useful in the following situations:

  • You have a new or relatively new car
  • Your car is expensive to repair
  • You drive frequently in city traffic
  • You want maximum claim benefits
  • You prefer lower out-of-pocket costs during repairs

For older cars, the cost of the add-on may sometimes be higher than its benefit, so it’s good to evaluate based on your vehicle’s age.

What is Usually Not Covered?

Even with a zero depreciation add-on, certain items may not be covered, such as:

  • Engine damage due to negligence
  • Mechanical breakdowns
  • Normal wear and tear
  • Consumables like fuel or lubricants (unless separately covered)
  • Damage outside policy terms

Understanding these limits helps set the right expectations at the time of claim.

Things to Keep in Mind

  • The add-on is usually available for cars within a certain age limit
  • It must be purchased along with a comprehensive policy
  • It may have a limited number of claims allowed in a year
  • Reading policy terms helps you understand exact coverage

Choosing the right add-ons ensures your policy matches your driving needs.

Conclusion

The HDFC ERGO Car Insurance Zero Depreciation add-on is a helpful option for car owners who want better claim support and fewer deductions during repairs. While it increases the premium slightly, it can save money in the long run by covering depreciation on replaced parts.

Before adding it to your policy, consider your car’s age, usage, and repair costs. A well-chosen add-on can make your insurance more effective and help you handle unexpected situations with less financial stress.

Frequently Asked Questions (FAQs)

Q1. What is the Zero Depreciation add-on in car insurance?
It is an optional cover that reduces or removes depreciation deductions on certain car parts during a claim. This means you may receive a higher claim amount and pay less from your own pocket for repairs.

Q2. Is the Zero Depreciation add-on available with all policies?
It is usually available with comprehensive car insurance policies. You can choose this add-on while buying a new policy or during renewal, depending on eligibility.

Q3. Does this add-on increase the premium?
Yes, adding zero depreciation cover increases the premium slightly. However, it can help save money during repairs by covering depreciation on replaced parts.

Q4. Who should consider buying this add-on?
It is often suitable for new or relatively new cars, expensive vehicles, and cars that are driven frequently in city traffic where the chances of minor damage are higher.

Q5. Are there any limits on claims under this add-on?
Some policies may allow only a limited number of claims in a year under the zero depreciation cover. It is always good to check the policy terms for exact details.

Q6. What is usually not covered under this add-on?
Mechanical breakdowns, normal wear and tear, and damages caused outside policy conditions are generally not covered. Consumables may also be excluded unless covered by another add-on.

Q7. Can I get help with choosing or renewing this add-on through Square Insurance?
Yes, you can get guidance on policy features, add-ons, and renewal support through squareinsurance to help you select the right coverage for your car.

Note

For convenient access to policy details, renewal reminders, and insurance support, you can also use the Square Insurance POS – Apps on Google. The app helps you manage your insurance information and stay updated anytime from your mobile device.