Depreciation is a natural phenomenon that reduces the value of an asset over time. Just like every other asset, the value of a two-wheeler also diminishes with time. By default, the responsibility to bear the depreciation cost amount rests with the owner and not the bike insurance company.
Therefore, at the time of claim settlement, the insurer deducts the cost of depreciation incurred by the insured's two-wheeler from the claim amount. This makes the policyholder get a lesser amount of compensation from the insurer. However, a policyholder can shift the burden of bearing the cost of depreciation from himself/herself to the insurance company with the help of a zero depreciation cover.
A zero dep two wheeler Insurance, also known as nil depreciation and bumper-to-bumper cover, is a popular two-wheeler insurance add-on cover. It can opt with a comprehensive as well as a standalone own-damage two-wheeler insurance policy. It provides 100% depreciation coverage for all the parts of your two-wheeler except tyres, tubes and batteries which are covered at 50%. Most Insurance companies allow 2 zero depreciation claims during the tenure of a policy, however, there are some exceptions like IFFCO Tokio General Insurance, Royal Sundaram General Insurance Company, New India Assurance Company which allow the unlimited number of zero depreciation claims during the tenure of a policy.
Zero Depreciation Bike Insurance Cover should ideally be opted by the following:
Age of Two-wheeler |
Depreciation Without Zero Dep Cover |
Depreciation With Zero Dep Cover |
Under 6 months |
Nil |
0% |
6 months to 1 year |
5% |
0% |
1-2 years |
10% |
0% |
2-3 years |
15% |
0% |
3-4 years |
25% |
0% |
4-5 years |
35% |
0% |
5-10 years |
40% |
0% |
Above 10 years |
50% |
0% |
Part of Two-wheeler | Rate of Depreciation Without Zero Depreciation | Rate of Depreciation With Zero Depreciation |
Rubber/nylon/plastic parts | 50% | 0% |
Fibre glass parts | 30% | 0% |
Glass parts | Nil |
0% |
Disclaimer: This article is issued in general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
Highlighted below are the benefits of a two-wheeler insurance policy with zero depreciation cover:
Prior to settling claims for the repair of your bike, the insurance company considers the depreciation rate for different parts of the bike. Different parts of bikes have different depreciation rates, moreover the claim rates also get affected based upon the age of your two wheeler.
A zero depreciation add on cover enhances the basic coverage of your two wheeler insurance policy, and almost reduces your expenses to zero. By investing a little amount for the add on cover, you get a better claim amount that will also enhance your savings.
Any expenses incurred by you related to replacement or repair of the bike's insured parts are worked out without taking into account the depreciated value.
With the onset of technology, purchasing a zero depreciation cover alongside the basic plan for your bike is very easy. The policyholder can easily purchase the add on cover online at the time of buying or renewal of your bike insurance policy. You can simply choose the zero depreciation cover when you are buying a comprehensive plan for your bike insurance.
Let us understand all the inclusions of the zero depreciation add on cover:
Let us understand all the exclusions from the zero depreciation add on cover:
With zero-depreciation add-on cover, you can get rid of the depreciation worry to quite an extent which reduces the value of claim for your bike after an accident or a mishap. Here are the benefits to own a zero-depreciation cover:
Generally, a zero depreciation add-on cover costs almost 15% of the bike insurance premium. Though it may seem to be a high amount of price for a bike insurance add-on cover, it is certainly worth the cost of the zero depreciation add-on cover as the amount of compensation which you will receive due to this add-on cover will prove to be significantly higher than the amount of its policy premium.
When it comes to purchasing a zero depreciation add-on cover for your bike insurance, here are a few points which you should always keep in mind:
It is extremely important to go through the policy document carefully and comprehend conditions related to each add on cover. Generally, a zero depreciation cover can be availed under the following cases:
Note: These conditions can differ from one insurance provider to another. Therefore, at the time of buying an insurance plan with add-on cover, do enquire with the insurer to know more regarding the terms and conditions for zero depreciation cover.
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