Updated on 2 Jan 2026
When you buy a car, one of the most important things you need to think about is car insurance. It is a legal requirement and also a way to protect yourself from big financial losses in case of accidents or vehicle theft. However, when you start looking at car insurance plans, you may come across many terms that can confuse you. Two of the most common terms are comprehensive insurance and zero depreciation car insurance. If you are planning to buy a car or renew your policy, it is important to know the difference between them. This blog will help you understand what each one means, how they work and which one may be better for you.
What is comprehensive insurance?
Comprehensive car insurance provides extensive coverage, protecting your vehicle from theft and damages caused by accidents, natural disasters, vandalism and other unforeseen events. It also covers third-party liabilities, including injuries to other road users and damages to their properties. Additionally, comprehensive policies often include personal accident coverage for the owner-driver. It also offers options to enhance the coverage with add-ons like engine protection, roadside assistance and more.
What is zero depreciation insurance?
Zero depreciation insurance, also known as 'bumper-to-bumper' insurance, is an add-on cover available with the comprehensive policy. It ensures that, in the event of a claim, the insurer pays the full cost of replacing or repairing damaged parts without considering depreciation. This means you receive the full claim amount, as the depreciation cost of parts is not deducted.
A zero depreciation rider is typically available for vehicles up to five years old. Due to the enhanced coverage, premiums are generally higher than standard comprehensive policies.
Comprehensive insurance vs zero depreciation insurance: Key differences
Comprehensive car insurance covers damages from accidents, theft, fire and natural disasters, along with third-party liability, but accounts for depreciation, reducing claim payouts for older parts. Whereas the zero depreciation add-on ensures full claim amounts without considering depreciation, making it ideal for new or expensive cars. While this rider offers better financial protection, it comes with higher premiums. The choice of opting for just comprehensive insurance and adding riders depends on a car’s age, value and the owner’s preference for cost versus coverage.
Which one is better - Comprehensive or zero depreciation insurance?
The answer depends on your situation. If you want only basic wide coverage at a lower premium, comprehensive insurance is enough. However, if you do not want to worry about paying from your pocket during claims, adding a zero depreciation add-on to the comprehensive policy is better. This is because standard comprehensive policies account for depreciation when paying the compensation. The premium with the zero depreciation rider will be higher, but the benefits are more.
For example, if you bought a brand-new car, you may want zero depreciation cover. In the first 5 years, the car’s parts depreciate very fast. If you only have a normal comprehensive plan, you may end up paying a big amount yourself whenever there is damage. Zero depreciation cover saves you from that.
Factors to consider before choosing between comprehensive & zero dep insurance
If you are buying car insurance online, the choice between comprehensive and zero depreciation insurance depends on various factors:
Vehicle age: If your car is new (less than five years old), zero depreciation cover is beneficial as it offers full claim settlement without accounting for depreciation. For older vehicles, comprehensive insurance may suffice.
Financial considerations: Zero depreciation policies come with higher premiums. Assess your budget and determine if the additional cost aligns with the benefits offered.
Risk factors: Consider your driving environment. If you frequently drive in high-risk areas or under challenging conditions, the enhanced coverage of zero depreciation insurance can be advantageous.
Personal preference: If you prefer minimal out-of-pocket expenses during claims, zero depreciation cover ensures you don't bear the depreciation cost of parts.
For new car owners seeking maximum coverage and willing to pay a higher premium, zero depreciation insurance is ideal. For those with older vehicles or looking for a more cost-effective option, comprehensive insurance remains a solid choice.
Conclusion
Car insurance is not just about meeting a legal requirement. It is about protecting yourself from unexpected financial shocks. A comprehensive car insurance plan or policy gives you wide coverage at a lower price but cuts depreciation during claims. Including a zero depreciation add-on with it costs more but ensures you get maximum claim benefit without worrying about depreciation.
To get clear, personalised guidance for choosing the best car insurance and required add-ons, simply fill out the form on this page. Our experts will help you with the selection.
FAQs
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Can I buy zero depreciation insurance without comprehensive insurance?
No, zero depreciation is an add-on. You can only get it with a comprehensive plan.
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Is the premium for zero depreciation very high?
The premium is usually higher than a normal comprehensive plan when you choose an add-on. It usually depends on the car’s model and age.
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Does zero depreciation cover everything?
No, it does not cover engine damage due to oil leakage, tyre wear and tear or regular maintenance costs. It mainly removes depreciation from claims.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.