Difference Between Own Damage and Zero Depreciation Cover (2024)

Own damage insurance vs zero depreciation car insurance

You can get car insurance coverage for own damage only if you buy a Comprehensive Plan. On the other hand, you need to separately buy the Zero Depreciation car insurance add-on to get coverage against depreciation on the vehicle. Both covers help you get more out of your car insurance plan. Let’s understand in detail what is the meaning of Own Damage and Zero Depreciation.

What is Own Damage insurance?

There are two major types of coverages offered under a car insurance policy. First is the mandatory, Third-party Car Insurance Policy, and the second one is Own Damage Cover.

The former will help you cover third-party losses like property damage, injury, or death. But it does not cover your car against damages. That is the job of the Own Damage cover. You can claim damage to your car only if you have a Comprehensive Car Insurance policy, i.e. only if it covers Own Damage.

What is Zero Depreciation in car insurance?

To understand Zero Depreciation, we must first know what depreciation is. Depreciation refers to the decrease in the car’s value with time. It is important to not only price your policy during car insurance renewal but also plays a huge part in the case of claims.

The insurer will deduct the applicable depreciation from your car insurance claim. This is where zero or nil depreciation comes into the picture. You can get more claim amounts if your car has extensive damage, as the insurer will not deduct the depreciation applicable to the car.

To simplify both concepts, let’s go back to see what happened when the two people with a similar car model made a claim.

Since they both bought their cars in the same year, a similar amount of depreciation was applicable to the vehicles. Coincidentally, they both also damaged their cars on the same turn on the road a few months apart, so the damage was similar.

The claim amount of the person with the Own Damage cover received less claim amount than the other person who had a Zero Dep policy. This is because depreciation decreased the claim amount for the former.

Also, read: Difference Between Third Party vs Zero Depreciation Car Cover

Who needs Zero Dep and Own Damage Insurance?

Now that you understand the difference between own damage and zero depreciation, let’s move on to the list of people that will benefit from buying these two types of policies.

Who needs Own Damage cover?

Here is a list of situations when you can go for a basic Comprehensive Car Insurance Policy with Own Damage cover.

• If your car is beyond the age of 5 years and the insurance company is not ready to offer a zero dep policy.

• If you are on a tight budget for buying car insurance.

• If you use the car very rarely.

• If you are a safe driver and follow all the traffic laws to the best of your ability.

Who needs Zero Dep insurance?

Here is a list of situations when you can go for a Comprehensive Car Insurance Policy with Zero Dep Insurance.

• If you own a new car that is less than 5 years old.

• If you own a luxury car with expensive car parts.

• You can stretch your car insurance budget to accommodate additional coverages.

• If you are a new driver and are learning to drive.

Frequently asked questions

Explore more:

• Difference Between Own Damage and Third-party Car Insurance

  See Also

  Standalone Own Damage (OD) Car Insurance PolicyWhat is TP in Car InsuranceStandalone Own Damage (OD) Car Insurance Policythrough no fault of her/my etc own | meaning of through no fault of her/my etc own in Longman Dictionary of Contemporary English

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