Zero Depreciation Car Insurance
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Manasvi Gupta

Written By

Manasvi Gupta

Manasvi Gupta

Manasvi Gupta

Content Writer

Storyteller at heart, Manasvi brings 4 years of content and marketing experience to Digit. Whether it's writing SEO-optimised articles or a researched and insightful blog, she strives to transform ideas into creating impactful and engaging content.

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Manasvi Gupta

Manasvi Gupta

Content Writer

Storyteller at heart, Manasvi brings 4 years of content and marketing experience to Digit. Whether it's writing SEO-optimised articles or a researched and insightful blog, she strives to transform ideas into creating impactful and engaging content.

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Reviewed by:

Mayur Kacholiya

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Mayur Kacholiya

Product Head - Motor

Mayur specializes in motor insurance and is responsible for overseeing the development and management of motor insurance products. With expertise in product strategy and market analysis, he focuses on developing customer-centric insurance solutions.

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mayur-black-white-test

Mayur Kacholiya

Product Head - Motor

Mayur specializes in motor insurance and is responsible for overseeing the development and management of motor insurance products. With expertise in product strategy and market analysis, he focuses on developing customer-centric insurance solutions.

What is Zero Depreciation Car Insurance, It's Coverage & How it Works?

If you’re worried about spending a large part of your savings on car repairs after an accident, Zero Depreciation Car Insurance policy is your solution. This car insurance add-on offers peace of mind to you by removing depreciation costs during claim settlements.

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What is Zero Depreciation Car Insurance?

what is zero depreciation car insurance

What is Zero Depreciation Car Insurance?

Zero Depreciation add-on cover, also known as bumper-to-bumper or nil depreciation cover in a comprehensive car insurance policy ensures that the insurer does not deduct the depreciation amount on the assessed car parts as per the policy document. 

The benefits under the zero dep add-on can be utilized up to a maximum of specified number of times during the policy period. 

Thus, if you have zero depreciation add-on cover, you can claim the total cost of replacement of damaged car parts in case of an accident and save a huge amount.

What is Depreciation?

what is depreciation

What is Depreciation?

Depreciation in car insurance is the decrease in the market value of your car over time due to its natural wear and tear. Thus, the older your car is, the higher is its depreciation. 

It's a factor that comes into play when you make a claim for damage to your car under a comprehensive car insurance policy.

You can calculate depreciation on your car in 2 ways:

  • If you’ve a new car, its value starts to depreciate as soon as it hits the road. This is known as overall depreciation, which is generally used for calculation in case of total loss or theft. 

  • In case of partial loss or damage to your car, the depreciation of specific car parts is calculated separately.

Why Customers Trust Digit Car Insurance?

stats

1.2 Crore+

Policies Sold

75 Lacs+

Cars Insured

8 Lacs+

Claims Settled

3000 Crore+

Paid-in Claims

96% Claims Settled

FY'25

9000+

Cashless Garages

Disclaimer: "The total no of claims settled since inception till 31st December 2024" Disclaimer: "The total no of unique private car vehicles insured since inception till 31st December 2024" Disclaimer: "The total amount of claims paid since inception till 31st December 2024" Disclaimer: This Claim Settlement Ratio is calculated for Overall Motor line of business of Digit. CSR Is calculated for FY'25. CSR Ratio is count of (Claims paid + Claims Closed) / (Claims O/S at Start + Claims Reported - Claims O/S at End) |"Disclaimer: The total count of network garages as of 31st December 2024"

Depreciation in Car Insurance Explained

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Why Should You Get Zero Depreciation Add-on with your Car Insurance?

Save Money

Standard car insurance policy deducts depreciation amount, thus, leaving you with a lower payout than the actual repair costs. So, having a Zero Depreciation add-on reduces your out-of-pocket expenses to almost zero during the claim, ensuring you receive the full Insured Declared Value (IDV) for repairs or replacements. This is because without a Zero Dep add-on the cost of depreciation of the parts must be borne by you. But with a Zero Dep addon, that is taken care of by your insurance company.

Higher Claim Amount

Securing your car with a zero-depreciation add-on means you get protection from financial loss and compensation for the full repair or replacement amount, as depreciation on your car’s parts won’t be calculated. Thus, you’ll receive a higher amount during claim settlement.

Affordable

You can opt for the Zero Depreciation Car Insurance Add-on Cover along with your standard Comprehensive or Own Damage car insurance policy by paying an additional premium, which is generally low and affordable. This way you can protect your car and your pocket at an affordable cost.

Peace of Mind

Accidents are financially and mentally draining, and worrying about covering repair costs shouldn't add to the burden. So, opting for a zero depreciation addon assures you that you are financially protected in case of an accident, which can be so satisfying and really gives you some peace of mind.

Digit’s Motor Insurance Claim Settlement Ratio is 96% for FY’25

Digit’s Motor Insurance Claim Settlement Ratio is 96% for FY’25

When it came to motor insurance specifically, Digit showcased a high-efficiency Claims Settlement Ratio (CSR), with 96% of motor claims settled seamlessly and we make this simple with:

  • Smartphone-enabled self-inspection process, with which you can file your claim in minutes!

  • Cashless Claims at over 9000 garages in India, so you can get your two-wheeler fixed without stress. 

  • Everything digital and paperless. No need for hard copies—just upload everything on our app, and you're all set!

What Our Customers Have to Say about Us

4.7/5

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(250K + Customer Ratings)

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quote 6 Dec 2024
a great pleasure to be affiliated with you , Had met an accident and got the damaged parts replaced within a day after raising the claim . Thank You
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Shaaz Suhail Salafi

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quote 13 Dec 2024
Very good service. Within two minutes I have renewed my car insurance online.
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Ajay Bharade

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quote 13 Dec 2024
Dear For todays world If any One wants to open a fresh Vehicle Insurance Policy which has all the transparency users frndly Plus the staff is very cooperative hats off. Wishing God bless for all yr future Endeavor 's. Sr Citizen-Policy-Investor
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DinShaw Sahukar

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quote 20 Dec 2024
Quick reaction on Road side assistance and continuous follow up till resolution. Happy with assistance in late night hours.
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Abhishek Sharma

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quote 13 Aug 2024
I had issue with the motor insurance policy and wanted to upgrade it. The customer care executive had enough patients to explain me everything point to point. Thanks a lot Sudip.
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Pratheesh R

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Digit Car Insurance in News!

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How is Depreciation Calculated in Car Insurance?

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How is Depreciation Calculated in Car Insurance?

According to the Insurance Regulatory and Development Authority of India (IRDAI), following are the depreciation rates, on the basis of which the total depreciation of your car is calculated:

Depreciation Rates for Different Parts in Vehicles

Vehicle Parts Depreciation Rate (%)
Rubber, Nylon and Plastic Parts  50% 
Fiber Glass  30% 
Glass  Nil 
Car Paint  50% depreciation on the material cost of total painting charges. 25% of the total painting charges (in case of consolidated bill of painting charges) 

Depreciation Rates for Metallic Parts in Vehicles

Age of Vehicle Rate of Depreciation
Less Than 6 Months  Nil 
More Than 6 Months to 1 Year  5% 
More Than 1 Year to 2 Years  10% 
More Than 2 Years to 3 Years  15% 
More Than 3 Years to 4 Years  25% 
More Than 4 Years to 5 Years  35% 
Exceeding 5 years but not exceeding 10 years  40% 
More Than 10 Years  50% 

Depreciation Rates for All Other Parts in Vehicles

Age of Vehicle % of Depreciation
Below 6 months  Nil 
Exceeding 6 months but not exceeding 1 year  5% 
Exceeding 1 year but not exceeding 2 years  10% 
Exceeding 2 years but not exceeding 3 years  15% 
Exceeding 3 years but not exceeding 4 years  25% 
Exceeding 4 years but not exceeding 5 years  35% 
Exceeding 5 years but not exceeding 10 years  40% 
More than 10 years  50% 

Depreciation Rate for Fixing IDV of Vehicle

Age of Vehicle % of Depreciation for Fixing IDV
Not Exceeding 6 months  5% 
Exceeding 6 months but not exceeding 1 year  15% 
Exceeding 1 year but not exceeding 2 years  20% 
Exceeding 2 years but not exceeding 3 years  30% 
Exceeding 3 years but not exceeding 4 years  40% 
Exceeding 4 years but not exceeding 5 years  50% 

What is Not Covered Under Zero Depreciation Add-on Cover?

Under Zero Depreciation add-on cover, certain things in addition to the general exclusions listed under car insurance are not covered. Let us look at them in detail:

Invalid insurance policy

The claim will not be entertained if the car insurance policy has expired.

Damage can’t be inspected

In case, the damage caused to the vehicle can’t be inspected before it is repaired, the insurer is not liable to entertain the claim.

Loss covered under different policy

Loss claimed for damage caused to the covered vehicle under different types of insurance policy will not be covered by Digit.

Zero Dep Add-on not included under ‘Own Damage’ section

A claim will not be payable under Zero Depreciation add-on if it is not covered under OD section of the policy.

Claim registered after 30 days of the loss/damage

The add-on cover will not entertain any claim if there is a delay of more than 30 days since the damage was caused.

Depreciation on specific parts

The insurer will not cover depreciation amount applicable to parts like battery and tyres of the insured vehicle as per the policy.

Repair cost not approved under the policy

The cost incurred by the policyholder to repair any part, subpart or accessory in the vehicle which is not approved under the car insurance policy can’t be claimed for.

Factors Affecting Zero Depreciation Car Insurance Premium

factors affecting zero depreciation car insurance

Factors Affecting Zero Depreciation Car Insurance Premium

Following are the factors that will affect the premium of your zero depreciation addon cover:

Age of your car - Since a zero depreciation addon is directly related to the aging of your car and its parts, the age of your car plays a huge factor in determining the premium for your zero depreciation addon cover. 

Model of your car - In a car insurance, a lot depends on the model and type of your car. Since the cost of its parts too will depend on it. Therefore, the kind of car you have also plays a huge factor in determining the cost of your zero depreciation addon cover.

Location of your car - Every city faces different risks when it comes to driving on the roads. Therefore, in a car insurance, your premium- including the additional premium of your zero-depreciation cover will be dependent on the city you drive your car in.

Fuel-type and engine of your car - Premium is subject to change if your car is a diesel, petrol, CNG, or electric type. Further, the zero-depreciation premium is comparatively higher for cars with an engine of higher cubic capacity than those with lower cubic capacity.

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Why is a Comprehensive Policy with Zero Depreciation Add-on Better than a Policy Without Zero Depreciation?

A comprehensive policy is no doubt a great way to protect your car from all possible damage. However, during claims you will still be required to pay for your car’s part depreciation.

Let’s understand the difference between Comprehensive Policy with and without Zero Depreciation Add-on cover:

Parameters Comprehensive Policy WITH Zero Depreciation Cover Comprehensive Policy WITHOUT Zero Depreciation Cover
What is it?  A zero-depreciation cover is an optional add-on you can opt for in your car insurance policy.

Having this add-on ensures your insurer won’t charge for your car’s depreciation during claims and hence, you won’t be liable to pay for the cost of depreciation of your car’s parts during claims.		 Comprehensive car insurance is a type of motor insurance policy that covers your car’s own damages and third-party damages.

This type of policy can further be customized for extensive coverage.
Premium  On opting for this add-on cover, your comprehensive car insurance premium will increase by approximately 15%.  The premium for a standalone comprehensive car insurance policy is lower than that of a comprehensive car insurance policy with zero dep add-on. 
Cost of Depreciation  Having a zero depreciation addon means you don’t need to pay for the cost of depreciation during your car insurance claims.  In a comprehensive car insurance policy, you will be required to pay for the cost of depreciation of your car’s parts during car insurance claims. 
How much do you save?  While you pay a slightly higher premium, your long-term savings are high as you aren’t required to pay for your car’s depreciation costs during claims.  The only saving you have is the extra premium you would save on by not opting for addons. 
Cost of Damage  Your car insurance company is responsible for paying the depreciated cost of car parts.  You are responsible for paying the depreciated cost of car parts. 
Depreciation Consideration  Depreciation of certain car parts is NOT considered at the time of claims.  You need to pay a fixed rate of depreciation on different car parts while filing claims. 

How is AI making Digit’s Motor Insurance Claim Process Faster & Smarter

claims phone screen

How is AI making Digit’s Motor Insurance Claim Process Faster & Smarter

At Digit, we believe filing a motor insurance claim should be simple, not stressful. That’s why we’ve built intelligent automation into every step of the process—so you can get back on the road, faster.

  • AI That Sees What You See: When you upload a video of the damage through our app, our AI doesn’t just watch—it analyses. Using advanced image recognition, it assesses the extent of the damage, classifies it, and helps determine the next steps. This means quicker evaluations, fewer delays, and a smoother experience for you.
  • Automated Document Processing: From inspection reports to claim forms, our AI systems automatically sort and process your documents. This reduces manual effort, minimises errors, and speeds up approvals. And with a human-in-the-loop approach, we ensure every claim is handled with both precision and empathy.
  • Automation That Works Behind the Scenes: Our systems also fetch claim details directly from partner platforms, eliminating the need for repetitive data entry. Whether it’s Bulk Policy Issuance or real-time claim registration, automation helps us move faster—so you don’t have to wait.

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67% Car Repair Work Approvals Done within 12 Hours

67% Car Repair Work Approvals Done within 12 Hours

In H2 FY25, our average car repair approval time was 14 hours and 46 minutes, with 67% of approvals completed within 12 hours. Only a few cases experienced longer wait times, typically due to complex assessments or the need for additional documentation, highlighting our commitment to minimising delays and maximising efficiency.

Rest assured, we carefully monitor every step to ensure your car is back on the road as swiftly as possible!

Digit Settled 9.16 Lakh Claims with 99.9950% Accuracy in FY'25

The below data is for all the products as given in the table below.

Settled 9.16 Lakh Claims Settled

Settled 9.16 Lakh Claims Settled

That’s how many times we showed up for our customers in FY 2024–25. Behind each of those numbers is a mishap, and we were right there, making sure things got sorted quickly. 

Out of these, nearly ₹6.52 lakh were motor insurance claims alone—proof that we’re there when it matters most, whether it’s something trivial or serious. 

₹4,622 Crore Paid in Claims

₹4,622 Crore Paid in Claims

From minor hiccups to major emergencies, we made sure our customers didn’t have to carry the financial burden alone. Quick settlements, zero confusion, and real peace of mind. 

Of this, ₹2,199 crore was paid out under motor insurance, covering everything from accidents to unexpected situations like rat damage.

99.9950% Claims Accuracy

99.9950% Claims Accuracy

Out of 9.16 lakh claims in FY 2024–25, only 256 were escalated to the Hon’ble Ombudsman^. Out of which only 46# were escalated and ruled in favour of the customer. This significantly proves the claim's accuracy rate of 99.9950%.

For Motor Claims, out of 256 escalated claims for Digit, just 124 were motor-related. By year-end, 104 motor claims were closed, with 28 resolved through mediation. Only 26 health claim decisions went in favour of customers.

Ombudsman Complaints for FY 2024-25

The below information is a summary of escalated claim cases reviewed by the Hon’ble Ombudsman in FY 2024–25. 

LOB Total Claims Paid (in number) Total Claims Amounts Settled Total Complaints that went to Ombudsman Total Complaints where final decision was given Total Complaints Settled via Mediation Total Decisions in favour of Customer
Health (including PA, travel) 2,18,082 ₹1,374.64 Crore 110 86 21 18
Motor(OD + TP, Including theft, PA) 6,51,954 ₹2,199.58 Crore 124 104 28 26
Other LOBs (miscellaneous) 45,642 ₹1,047.34 Crore 22 17 3 3
Grand Total 9,15,678 ₹4,621.56 Crore 256 207 52 47

Disclaimer: ^This data pertains to cases reported to various offices of the Hon’ble Insurance Ombudsman. Customers have the option to approach the Consumer forum as well; #Only includes complaints arising from claims. The company had a total of 11 complaints arising from non-claims, i.e., policy-related grievances (5 won, 2 settled, 1 lost, and 3 outstanding). One non-claim complaint where the decision went in favour of the complainant is not included in the numerator while calculating claims accuracy.

Interesting Claim Stories & Insights from Digit Customers

car od tr

A Digit Car Insurance customer received a total loss claim of ₹48.70 Lakh in Mumbai

In a recent case from Mumbai, one of our policyholders experienced a total loss after their private car sustained severe damage. Fortunately, the vehicle was insured, and we processed a claim payout of ₹48.70 lakh. This case highlights the importance of having dependable insurance coverage to stay prepared for life’s unexpected turns.
car tp tr

Digit Settled a third party claim worth ₹ 1.5 crores in Raipur, Chhattisgarh

In a recent case from Raipur, a private car was involved in an accident that tragically resulted in a fatality. While such incidents are deeply distressing, they also bring significant financial and legal responsibilities. Fortunately, the vehicle was covered under our third-party insurance policy, which enabled a compensation payout of ₹1.5 crore to the affected party.

This case highlights the critical importance of third-party liability coverage in motor insurance, offering essential financial protection during life’s most difficult moments.

Flood Damage Claims Cross ₹95 Crore, with ₹3 Crore Settled in Azitnagar

When we think of car insurance, we often imagine accidents or theft. But sometimes, the most significant threats come from nature itself. Azitnagar in the Krishna district, had 529 flood-related claims filed this year, with payouts exceeding ₹3 crore. Across the country, we paid out more than ₹95 crore in flood and inundation claims.
unlucky customer

Seven Accident Claims in One Year on One Car, All Approved

One customer in Patna had a year they won’t forget. Their brand-new Kia Carens was involved in not one, not two, but seven accidents. Six happened while driving, and one happened while the car was parked. It was an actual test of their insurance policy and it passed. Every claim was covered, proving that dependable coverage can make all the difference when things go wrong again and again.

Premium Protection For Premium Vehicles

This year, we received some standout premium payments across different vehicle types. A Ferrari topped the list in the four-wheeler category with a premium of ₹8.04 lakh. In the two-wheeler segment, a Hayabusa was insured with a premium of ₹44,000. And in the commercial vehicle category, a Volvo L150 wheel loader was covered with a premium of ₹3.53 lakh. This highlights how our insurance scales to match the value and purpose of every vehicle, whether it’s built for speed or style
bond number plate

Over 670+ Vehicles Insured with ‘007’ Registration

This year, over 670 vehicles insured with us proudly carried the iconic Bond number “007”. Among them, one standout customer paid a premium of ₹5 lakh. This highlights how our insurance supports unique preferences while ensuring complete coverage.

Role of a Zero Depreciation Cover During Claim Settlement

role of a zero depreciation while claim

Role of a Zero Depreciation Cover During Claim Settlement

The main role of a zero-depreciation cover during claims is to save the money you’d be spending from your pocket. 

Let’s take an example to make this simple for you.

If your total claim amount payable is ₹20,000 and the total cost of your car part’s depreciation is ₹6,000, then without having a zero-depreciation cover- your insurer will account for this cost and only pay you ₹14,000. However, if you have zero depreciation cover, then, you will receive the entire ₹20,000 as your claim amount! 😊

Things to Remember about Zero Depreciation Insurance

things to remember about zero depreciation insurance

Things to Remember about Zero Depreciation Insurance

  • Zero Depreciation add on cover policy will not be valid once you have claimed for the specified number of times as mentioned in the policy document. 

  • A Zero Depreciation only covers the cost of your car’s part depreciation during claims and doesn’t cover your compulsory deductibles.

  • Claims made by the insured under this add-on are subject to the terms and conditions of your Car Policy.

Who Should Opt for a Zero Depreciation Cover?

who should opt for zero depreciation cover

Who Should Opt for a Zero Depreciation Cover?

If you plan to buy a new car soon, you should opt for a zero-depreciation cover in your comprehensive car insurance policy. You’re already spending a whole lot of money for your new car, spending a little more on its insurance with the right add-ons will help to prevent you from spending any more money.

So, if you are in any of the following categories, you should buy a Zero Depreciation Cover.

  • If you live or drive frequently in an accident-prone area. 

  • If you have recently learned to drive a car.  

  • If you cannot bear the sight of small dents and bumps on your car.

  • If you own a luxury car or have expensive spare parts. 

  • If you wish to reduce your out-of-pocket expenses in case of any damage.

Note: Zero Depreciation add-on cover has been filed as Digit Private Car Parts Depreciation Protect with Insurance Regulatory and Development Authority (IRDA) with UIN number IRDAN158RP0005V01201718/A0009V01201718.

FAQs about Zero Depreciation Car Insurance