Is zero depreciation car insurance worth buying? See how it works, who needs it, its limits and what to check in the policy. Get a quote to compare options.
Zero depreciation cover is often worth buying for newer cars, because it usually gives a higher claim pay-out. It is an add-on to a comprehensive policy. It stops the insurer from cutting depreciation on replaced parts, as per policy terms. It may not be needed for an old car with a low value.
What is zero depreciation cover?
Zero depreciation is also called nil depreciation or bumper-to-bumper cover. It is an optional add-on. You can read the basics on our zero depreciation cover page.
Normally, when a part of your car is replaced after an accident, the insurer reduces the part's price for age. This reduction is depreciation. You then pay the difference yourself.
With the zero depreciation add-on, the insurer does not make this cut on replaced parts like plastic, rubber, glass and metal, as per policy terms. So the claim pay-out is higher and you pay less from your pocket.
A simple example
Say a bumper is badly damaged and must be replaced.
- Without the add-on: The insurer pays the part's price minus depreciation. You pay the rest.
- With the add-on: The insurer usually pays the full part price, as per policy terms. You pay only your deductible and any non-covered items.
The deductible is the part of every claim you pay yourself. Some items, like consumables, may still not be covered unless you add a separate cover.
Who should consider it
Zero depreciation is usually a good fit if:
- Your car is new or fairly new
- You drive in heavy city traffic
- You park on the road or in a crowded area
- You want to keep your out-of-pocket cost low at claim time
- Your car has costly parts, like sensors, lights or glass
It is usually offered for newer vehicles, often up to around 5 years old. Check each insurer's rules, because the age limit differs.
Who may not need it
You may skip it if:
- Your car is old and its value is low
- Your insurer does not offer it for your car's age
- You rarely drive and the risk of damage is small
- You are fine paying the depreciation cost yourself
If your car is old, our post on insurance for old cars may help you choose better.
Limits you should know
Zero depreciation is useful, but it is not magic. Please check these points in your policy wording:
- Number of claims: There is usually a limit on how many claims you can make in a year under this add-on.
- Age limit: Many insurers allow it only up to a certain vehicle age.
- Excluded items: Wear and tear, mechanical breakdown and consumables are usually not covered by this add-on.
- Deductible: You still pay the compulsory deductible, and any voluntary deductible you chose.
- Premium: The add-on adds to your premium.
Also, a claim can reduce your No Claim Bonus. NCB is a discount on the own-damage premium for claim-free years. You lose it if you claim in that year. So for tiny damage, it may be smarter to pay yourself. Our no claim bonus page explains how this works.
Other add-ons that go well with it
Many owners pair zero depreciation with other covers:
- Engine protection: helps with engine damage that a normal policy may not cover
- Consumables cover: pays for items like nuts, bolts, oil and coolant, as per policy terms
- NCB protection: helps keep your discount after a claim, as per policy terms
- Roadside assistance: help if your car breaks down
Terms differ by insurer. You can read about more options in our guide to car insurance add-ons.
How to decide
- Check your car's age and value.
- Ask if the insurer offers the add-on for your car.
- Read the claim limit per year.
- Check which items are excluded.
- Think about your driving and parking habits.
- Compare the extra cost with the repair costs you could face.
If most answers point to a newer car in busy traffic, the add-on is usually worth a look. You can get a quote with and without the add-on and compare the cover.
Rules can change, and each insurer has its own terms. Your policy document is always the final word.
FAQs
Can I buy zero depreciation cover with a third-party policy?
No. It is an add-on to a comprehensive policy, because it applies to damage to your own car.
Is zero depreciation available for old cars?
It is usually offered for newer vehicles, often up to around 5 years old. The limit differs by insurer, so check the rules.
Does zero depreciation cover everything?
No. Wear and tear, mechanical breakdown and consumables are usually not covered, and you still pay the deductible.
How many claims can I make with zero depreciation?
There is usually a limit on claims per year. Check your policy wording for the exact number.
This guide is for information only. Rules and policy terms can change, and the policy document is final. Please read your policy wording.