I prefer buying most of the products and services online all the time, and I think most of the younger generation do the same. However, it has been my habit to research before getting into any new type of product or service online and compare it with the local shops and service providers. Recently I bought a Wagon-R for my parents, and It came with the bundled policy of 1-year full insurance plus 2 years of third party car insurance.

It was about to expire and I started researching on sites like CoverFox and PaisaBazaar to find the best Own Damage Car Insurance as I already have third party insurance left in my original policy. At the same time, the car company Maruti Suzuki’s insurance division followed up with me to renew the same policy with them.

The price difference was almost 30% in both of their offers. So I got curious and had a word with my local insurance provider, who mentioned the online seller is only selling you Comprehensive Policy whereas we’re also adding Zero Depreciation to the same policy which covers your vehicle expenses 100%.

The surprising fact is this information was not clearly mentioned by online insurance providers, and they have mentioned the Zero Depreciation as an add-on service. I called and confirmed with these online companies, who confirmed the same thing.


Comprehensive vs. Zero Dep

So what are is the major difference between Comprehensive vs Zero Depreciation car insurance policy?

Comprehensive policies that are sold online and even offline as cheaper alternatives to complete insurance for your vehicle. While a digital consumer like you and me thinks it’s just the same thing.

If your vehicle is damaged in an accident and you’re supposed to pay Rs.50,000 in repairs, you expect your insurance should cover all of the expenses. But the comprehensive policy will cover only 50% of that value, i.e. only Rs.25,000 of expenses will be borne by the insurance company and the rest of the amount should be paid by the Car owner.

When we compare this with the Zero Depreciation policy which is known as Zero Dep Policy, Nil Depreciation or Bumper to Bumper cover offers 100% of compensation.

Every year vehicle depreciates in terms of its value, which is known as depreciation. And insurance companies calculate this depreciated value of your car, and based on the percentage of the damage costs are covered by your insurer. In the case of Zero dep, the cost of repairs or replacement of parts is not subjected to depreciation at all, meaning you get a hassle-free claim settlement of 100% of the cost. There are certain compulsory nominal fees that are to be paid by vehicle owners, but that’s all about it.

How much cost does Zero Dep add?

For my car that has IDV of 4,00,000, it costed me Rs. 7,200 for Zero Depreciation Insurance policy vs it was costing me Rs.5,500 for the comprehensive insurance policy including all taxes. So ballpark 25-30% extra premium will be charged for adding the Zero Depreciation feature to your car insurance.

What else can you get as an add on?

As most policies don’t cover damage to engines, you can consider Engine-Protect add-on, if you drive around bad city roads all day, and think your engine might get damaged by road. There is one more add-on named Return on Invoice which covers the difference between the declared value (IDV) of the car and actual value of the car mentioned on the invoice, when claims are bein settled.

I personally did not opt for any of the above-mentioned add-ons, as I personally don’t find it much valuable.

Should you get a Comprehensive Policy or Zero Dep Car Insurance Policy?

Car Insurance is for safeguarding yourself from future expenses that all of us hope should not happen. While minor car accidents that can give your car dents and a few other damages are quite usual if you drive the car daily in a crowded city.

The answer to this question really depends, but in my opinion, if you have to safeguard against future expenses, why not get it 100% with the zero depreciation add on? This can really be a personal choice, but do take into account where and how you drive, how frequently you drive and many other minor factors.

If you’re buying insurance just to comply with regulations, then you can do away with the cheapest third-party car insurance out there, but that’s the wrong thinking in my opinion. If you want the cheapest insurance policy, then you can avoid Zero Depreciation add-on and just get the own damage + third party insurance policy for your car.

A lesson to be learned from my online car insurance buying?

Well, don’t believe blindly when online companies sell policies saying they cover your OWN CAR DAMAGE. Call them and confirm how much percentage of expense they will cover, the category of your insurance, and what are extras you can buy with your insurance.

I hope you’re finding my experience valuable, feel free to ask questions in the comments section below, share with your friends and family who’re buying car insurance online for the first time!

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