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Difference Between Comprehensive and Zero Depreciation Insurance
Mar 31, 2021

Difference Between Comprehensive and Zero Depreciation Insurance

Car insurance is a type of motor insurance that provides on-road protection and financial coverage for the car and the car owner from risk and damages caused due to accidents. There are three different types of car insurance - comprehensive insurance, third-party insurance, and pay as you drive. Mr. Chahal bought a new car, Toyota Etios. While he knows that it is mandatory to have car insurance, and it is now easier to buy car insurance online, he was confused with so many options he found on the internet. He asked his friend Mr. Bedi. He suggested purchasing a third-party insurance policy, which is mandatory, and comprehensive insurance with an add-on of zero depreciation cover. As Mr. Chahal compares comprehensive insurance vs zero depreciation vs. third party insurance, the premium was on the higher side, and to save on insurance costs, Mr. Chahal bought only third-party insurance because it will protect him from financial liability in case of injury, disability, and even death due to a car accident. After six months, Mr. Chahal's car was stolen, and when he put a claim on a third-party insurance policy, they rejected the claim. It got rejected because the third-party insurance does not cover damage due to theft. While if Mr. Chahal bought comprehensive insurance, it would have covered the damage due to theft. Many people like Mr. Chahal never thought of any other damage to their car except an accident, and to save cost, they buy only a basic plan. A premium of comprehensive insurance is higher than third-party insurance, but it is cost-efficient since the benefits and coverage will save a huge amount. Also, the add-on coverage of zero depreciation will save you more money in the future. Let us compare car insurance plans to understand what is the difference between zero depreciation and comprehensive insurance in this article and importance of the same.

Comprehensive Insurance vs. Zero Depreciation

Comprehensive insurance is an extensive car insurance plan coverage for car damage caused by an accident, theft, natural calamities, vandalism, fire, etc. Comprehensive car insurance is a blend of insurance provided by a third party and OD (own damage) cover. For extra coverage, a comprehensive insurance policy can be further extended by add-on policies like roadside assistance cover, zero depreciation cover, medical insurance, engine protector, etc. In motor insurance, depreciation refers to reducing the vehicle's value over time due to wear and tear, out of date, or the age of the vehicle. The valuation of depreciation is applied for each car part except the glass material. Zero depreciation is a car insurance policy that offers the policyholder 100% complete coverage for all rubber, fiber, and metal parts if the car gets damaged in a collision. No depreciation will be withheld from the coverage of any car parts except batteries and tyres. Any mechanical damage, oil change is not covered in this plan. Also, the policy limits the number of claims in a year the policyholder can put.

What is the difference between zero depreciation and comprehensive insurance?

Premium Lower amount Little higher amount
Amount of Claim Settlement The settlement amount will be lower as the depreciation is estimated for all car body parts. The settlement amount will be higher as the depreciation is not estimated.
Repairing of Car Parts 50% depreciation will be considered on all repairing parts. Zero depreciation add-ons will cover the all the repairing cost.
Age of the car The depreciation of the car will increase as the car ages. With zero depreciation cover add-on, the depreciation will be considered nil.

Bajaj Allianz Car Insurance has a 4000+ network garage and offers up to INR 15 lakhs of personal accident cover to the owner/driver. Also offering up to 50% transfer of no-claim bonus from the previous policy if any.


1. Which is best, zero dep or comprehensive insurance?

Zero depreciation is an additional coverage that can be bought along with the comprehensive insurance. If you are planning to keep the car for a long time, it is advisable to get a zero dep add-on along with comprehensive insurance to ensure the value of your car will remain almost the same as the day you purchased it.

2. What are the exclusions in comprehensive insurance?

Damage caused by aging, wear and tear of the car. Depreciation of the car parts as its ages. Car damage caused due to driving under the influence of alcohol. Any car damage due to nuclear attack or mutiny war.


There are plenty of car insurance online that one can purchase. But the most important thing is to buy car insurance that covers the essential cost at the time of the accident and takes care of the car as it ages. It is recommended to purchase a comprehensive insurance policy with the add-on of zero depreciation. Because expensive spares parts have high rates of depreciation too. It is better to pay a little higher premium annually than a higher amount of repairs.

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