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Zero depreciation in two-wheeler insurance is an important component that you should be aware of. It is an add-on cover that offers added protection. When your bike depreciates in value due to age, the insurance claim amount also dips. This is why you need to invest in a good zero depreciation bike insurance cover.
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.
Also Read: Bike Insurance Add-On Covers Must Have
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 | NIL |
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.
Here are some advantages you get when you attach the zero dep insurance to your motorcycle insurance online plan:
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.
This rider acts as an additional layer of protection, especially for a new bike and all its spare parts.
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.
Get a zero depreciation rider along with your bike insurance policy and you will stand to get many benefits. From making several economic gains in the long run to have extra coverage, there are many advantages that you just cannot ignore. Thankfully, the zero depreciation rider is quite cheap and you can get it easily when you buy your motorcycle insurance plan online.
Also read: 5 Important Points to Compare Two-Wheeler Insurance Online in India
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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