What is Zero Depreciation for Two Wheeler Insurance?

What is Zero Depreciation Meaning in Bike Insurance

A zero depreciation bike insurance cover is a type of add-on cover that can be taken along with a comprehensive bike insurance plan, that negates the insured declared value (current market price) of the vehicle at the time of a claim. It is commonly known as a bumper-to-bumper insurance plan.

In the absence of zero depreciation two wheeler insurance, you will only get a percentage of the claim amount after you send your bike for repairs. The insurance provider will only take into consideration the depreciated value of the bike or the part of the bike that needs repair. This will be lower than the actual price of the component that is being replaced.

The depreciation rate on two wheeler is fixed by the IRDAI, Insurance Regulatory and Development Authority and is as follows:

Age of the two-wheeler	% of depreciation
Bikes less than 6 months	5%
Bikes more than 6 months old but < 1 year	15%
Bikes more than 1-year-old but < 2 years	20%
Bikes more than 2 years old but < 3 years	30%
Bikes more than 3 years old but < 4 years	40%
Bikes more than 4 years old but < 5 years	50%
Bikes more than 5 years old	Mutually decided by the insurer and the policyholder

 

So, depreciation is available for two-wheelers based on the age of the vehicle. Also, there is a rate of depreciation available for the parts of two-wheeler, such as:

Bike Components	% of depreciation
Tyre, rubber parts, battery, nylon, tubes and plastic parts	50%
Glass and fibre materials	30%
All other parts made of glass	NL

 

As a result, you will have to pay the difference amount. However, with a zero depreciation rider in place, the actual price of the component will be taken into consideration and the claim amount will be adjusted accordingly.

The factors that affect the premium for a zero-depreciation rider for your two-wheeler is the make and model of your bike, the age of the bike and the location where it is registered.

Advantages of Zero Depreciation Bike/Two-Wheeler Insurance

Here are some advantages you get when you attach the zero dep insurance to your motorcycle insurance online plan:

1. Cost-effective
The zero depreciation cover is very cost-effective as the increase in premium is much lower as compared to a much higher claim amount. This makes it extremely profitable for you.

2. Additional protection
This rider acts as an additional layer of protection, especially for a new bike and all its spare parts.

3. Hassle-free claim
Since the entire depreciation is taken care of by this add-on, the claim becomes hassle-free. The entire cost of repair as well as replacement of parts in case of a claim is borne by the two-wheeler insurance company. This is especially true for a new bike, as the cost of the spare parts would also be comparatively higher.

Keeping all the benefits of zero dep insurance mentioned above in mind, it can safely be said that a zero depreciation bike insurance rider proves to be very useful indeed. Explore your options and make the correct decision.