Decoding Zero Dep coverage for older cars

I bought a car in 2019 and had taken insurance with New India company. I came across the add-on coverage of zero dep while renewing my policy. Is it beneficial to opt for the add-on cover for a 5-year-old car?

- Shilpa Arora

-Name withheld on request

Opting for a zero depreciation (Zero Dep) cover for a 5-year-old car can be beneficial in certain situations, but it largely depends on factors such as the car's condition, usage patterns, and the cost of the add-on.

Zero Dep coverage ensures that you receive the full cost of repairs or replacements for damaged parts during a claim, without factoring in the vehicle's depreciation.

For instance, without Zero Dep, the claim amount equals the replacement cost minus depreciation, while with Zero Dep, the claim amount covers the full replacement cost.

This add-on is especially advantageous for newer vehicles or cars that typically have higher repair costs, minimizing out-of-pocket expenses.

For your 5-year-old car, the decision whether to opt for a Zero Dep cover or not depends on key considerations.