To make sure you get car insurance claims on time and without hassles, you buy a comprehensive policy. A comprehensive car insurance policy covers the risk associated with own damage (OD) and also covers the third-party risk. But, still one may not get the full claim when the need arises. This is because of the depreciation value that gets deducted resulting in a lower claim amount. Getting a car insurance claim for a lesser amount than what is expected is not something any of us will like.

When we insure a car or any other vehicle, the insured amount is called the Insured Declared Value (IDV) which is arrived at based on the manufacturer’s car price and depreciation depending on the age of the vehicle.

Based on the IDV of the car, you pay the premium to the insurer. And, at the time of claim, IDV gets adjusted for depreciation – From 5 per cent, if the car is less than 6-month old, to 50 per cent of depreciation on the car above 5 years old.

In addition, for the car parts that can be replaced, the depreciation value is fixed irrespective of the age of the car.

Therefore, at the time of a claim, a car insurance policyholder ends up receiving a lower amount from the insurer because of certain deductions in the form of depreciation.

There’s a way out to get the full IDV at the time of claim. If one adds a Zero-Depreciation Add-on Cover to the basic policy, the claim is paid in full without any deductions. The Zero-Depreciation Add-on Cover is an optional feature and one has to pay an additional premium to avail its benefits.

If you hold a car cover with Zero-Dep benefit, then at the time of a claim, the full IDV can be claimed without deduction for depreciation and damaged parts.

Although the claim is up to the IDV amount, any cost towards normal wear, tear and mechanical breakdowns will have to be borne by the insured. If you are looking to buy a new car, adding this add-on benefit helps. Most insurance companies allows zero-dep cover to be added at the time of an initial purchase of car only.

Therefore, there’s a difference between comprehensive and zero dep insurance. The former is essential while the former makes it a complete coverage with no out-of-pocket expenses.