The Nil Depreciation rider, also called Zero-depreciation or Bumper-to-Bumper rider, in motor insurance is an add-on provided with comprehensive vehicle or two-wheeler insurance policies. Without it, insurance companies always deduct a percentage of the repair costs billed in a partial loss claim payout, to account for ‘wear and tear’ of the vehicle. Many claim that a zero-depreciation add-on is needed only if the vehicle is less than around 5 years old. It is worthwhile to check the validity of this statement. What the Depreciation Deduction Actually Costs You The depreciation deductions on any partial loss claim payout follow a landmark IRDAI circular issued in January 2013 (IRDA/NL/ORD/MISC/006/01/2013), as an update on the General Regulation 9 (GR.9) of the India Motor Tariff. The Math: What Nil Depreciation Saves You, Age by Age Taking an example to see how the deductions combine, If a car claims for insurance payout and reports a total repair bill of ₹40,000. The repair cost breakdown: ₹15,000 for bumper and headlight (plastic & rubber parts) replacement, and ₹25,000 for fender and door panel (metal parts) replacement. The insurance policy pays for the zero-depreciation option. The depreciation deducted from partial claim motor insurance payouts, without the zero-depreciation rider, is as follows, As an illustrative example, a new petrol-run car bought in Bangalore, the Tata Nexon Smart +1.2 AMT, has a showroom price of ₹7,39,990. Manufactured 6 months ago, the quote for its yearly Own-Damage premium is ₹17,187, and the Nil-Depreciation add-on cost is ₹4,400 annually (Source: Zurich Kotak General Insurance premium calculator, accessed July 2026). For this new car, paying that added premium makes sense, seeing that the repair cost deductions would otherwise be high. Without the rider, the repair cost deductions also increase with the vehicle's age. Thus, an older vehicle gains more from the nil-depreciation add-on. In reality, most insurers stop offering the zero-depreciation rider for vehicles older than 5 years. And, the premium cost on the rider also decreases with the vehicle age. Taking the same car, the Tata Nexon, its nil-depreciation premium decreased to ₹2,671 in 4 years (Source: Zurich Kotak General Insurance premium calculator, accessed July 2026). Keep It or Drop It? A Decision Matrix