Why Zero Depreciation Cover Is Becoming Essential for Commercial Vehicle Owners

Rising repair costs and frequent vehicle usage are pushing commercial vehicle owners toward zero depreciation insurance covers, which help reduce out-of-pocket expenses during accident-related repair claims.

Mumbai | May 18, 2026

As operating costs continue to rise across India’s transport and logistics sector, insurance experts say more commercial vehicle owners are opting for “zero depreciation” add-on covers to protect themselves from expensive repair bills and reduced claim settlements. The trend has gained momentum particularly among fleet operators, delivery businesses and owners of new light commercial vehicles.

In a standard commercial vehicle insurance policy, insurers deduct depreciation charges on replaced vehicle parts while settling accident claims. This means owners often have to pay a significant amount from their own pockets for repairs involving bumpers, plastic parts, fibre components, headlights and rubber materials. However, a zero depreciation or “nil depreciation” add-on eliminates most of these deductions and ensures higher claim payouts.

Insurance industry observers note that the feature has become especially relevant for light commercial vehicles that operate extensively in urban traffic, highways and rough road conditions. Since these vehicles face frequent wear and tear, even minor accidents can lead to costly repairs and replacement expenses.

Experts say the add-on is particularly useful for new vehicles, usually those under five years old. While the premium for zero depreciation cover may be 15 to 20 percent higher than standard policies, policyholders often recover the additional cost during a single major repair claim.

Several insurers are also bundling additional protection options such as engine protection, roadside assistance, consumable cover and return-to-invoice policies to attract customers seeking broader financial protection.

At the same time, insurance advisors caution vehicle owners to carefully review policy terms before purchase. Zero depreciation cover typically does not include consumables, tyre damage, mechanical failures unrelated to accidents or claims beyond specified annual limits.

Online automobile communities and insurance forums have also witnessed growing discussions around claim settlement experiences, with many users recommending zero depreciation cover for reducing unexpected expenses during repairs.

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