Zero Depreciation Two-Wheeler Insurance
Every vehicle undergoes depreciation. The decrease in the worth of a bike that takes place due to regular abrasion over time is called depreciation. A zero depreciation insurance for bikes is an add-on cover under which the insurance provider of your policy would settle your bike insurance claim without considering the depreciation of your bike. So, here you get an enhanced claim amount as you are not required to pay for the depreciation.
Let us understand what is zero dep. insurance in detail starting with the zero depreciation bike insurance meaning.
What Do You Mean By Depreciation?
By depreciation, you mean the decrease in an asset's worth over a time period caused due to wear and tear/aging. So, in case of bike insurance, it is the reduction in the price of your two-wheeler due to normal deterioration over time. Every asset goes through depreciation. And similarly, the value of your bike also goes down with time. And by default it becomes the responsibility of the vehicle owner to bear the expenses of depreciation. Let us now check the meaning of zero depreciation bike insurance.
What Is Zero Depreciation In Bike Insurance Cover?
A zero dep. Insurance is an add-on cover under which your insurer will not consider the depreciation of your bike while settling your bike insurance claim. So, a zero dep. insurance means that you will get 100% coverage against all the elements of your bike except for a few like batteries, tyres, and tubes which are available at 50% coverage.
In normal circumstances, insured individuals while raising a claim are expected to pay the depreciation amount from their pocket. This is because the insurer compensates for the claim after deducting the depreciation value. But with Zero Depreciation bike insurance cover, the insurer will compensate for your claim without deducting the depreciation amount. So, now you know what zero depreciation bike insurance is. If you want to get complete reimbursement for claim settlement of your bike, you have to opt for a zero depreciation add-on cover.
Comparison In Depreciation In Bike Insurance With & Without Zero Depreciation Cover
|Bike Age (in years)||Depreciation in bike insurance with zero dep. add-on||Depreciation in bike insurance without zero dep. add-on|
|Below six months||Zero percent||Nil|
|Within six months to one year||Zero percent||Five percent|
|One to two years||Zero percent||Ten percent|
|Two to three years||Zero percent||Fifteen percent|
|Three to four years||Zero percent||Twenty-five percent|
|Four to five years||Zero percent||Thirty-five percent|
|Five to ten years||Zero percent||Forty percent|
|Above ten years||Zero percent||Fifty percent|
So, as you can see in the above list, the zero dep insurance after 5 years is more. So, as the vehicle ages, the depreciation also goes up.
Depreciation Rate Applicable On Bike Parts
Below are the list of parts that are covered at 50% under the zero dep. insurance for bike:
|Bike Parts||Depreciation Rate in bike insurance with zero dep. add-on||Depreciation Rate in bike insurance without zero dep. add-on|
|Nylon/Rubber/Plastic||Zero percent||Fifty percent|
|Fibre-glass||Zero percent||Thirty percent|
Advantages Of Having Zero Depreciation Bike Insurance Cover
Here are some benefits of zero dep insurance cover:
With an add-on cover of zero depreciation, every vehicle owner can get benefits and this for both new and experienced drivers. This add-on serve as an added protection to take care of the financial crises that might arise due to any mishap in your bike.
With zero depreciation add-on, the cost of repair in your bike is compensated without taking into account the depreciated value of your bike. So, you get a greater coverage amount reimbursed.
Restricts expenses from Pocket
With this add-on cover, you can restrict any extra cost which is otherwise needed for an insured person to pay as depreciation charges. However, if you already have this add-on coverage, your insurer will settle your claim even without taking the depreciation value in account.
It is true that you pay a higher premium with a zero depreciation add-on. But it is also true that you get a higher compensation from your insurer while making a claim. Further, if you buy the policy from an insurer who allows unlimited zero dep. claims, you can save money every time you raise a claim for your bike.
Zero Depreciation add-on cover allows you an added layer of protection, which is turn allows you greater peace of mind.
Process To Buy Zero Depreciation Bike Insurance Cover?
The availability of online ways of buying and renewing insurance has made it very simple to get a zero depreciation add-on cover. Anyone can get this cover together with their standalone add-on cover or with a comprehensive cover. This cover, however, is not available with a third-party bike insurance policy. Hence, you can purchase this add-on online during the time of bike policy renewal of your existing insurance or buying a new bike insurance.
Things That Are Included In A Bike Insurance Plan With Zero Depreciation Add-On Cover?
Things That Are Excluded In A Bike Insurance Policy With Zero Depreciation Cover?
Here are the things included in a bike insurance policy with zero depreciation add-on cover:
Under the below conditions you cannot avail the benefits of zero depreciation add-on cover for your two-wheeler:
Cost Of A Zero Depreciation Cover And Is It Worth The Price?
A zero dep. add-on is expensive and it might cost you around 15% of your bike insurance premium. However, despite the cost this add-on is certainly a worthwhile cover since the compensation amount received by the policyholder having this add-on cover is much greater. Also, this claim amount is most of the times higher than what you pay for the premium of the cover.
Things To Remember About The Zero Depreciation Add-On Cover?
Here are some points to remember about the Zero Depreciation Add-on Cover:
- It is available for new bikes that are not beyond two years old.
- This add-on does not remove the obligatory deductibles.
- Most insurers allow claims with zero depreciation add-on twice a year.
- Zero depreciation and bumper-to-bumper cover are almost similar.
With the above discussion, it is now clear as to what does zero depreciation bike insurance means. Many policyholders or policy seekers get confused between comprehensive insurance vs zero depreciation for bikes. However, it is to be noted that you cannot distinguish between zero depreciation bike insurance vs. comprehensive because zero dep. is a raider or add-on cover, while comprehensive bike insurance plan is an insurance policy. However, you can use a comprehensive plan to buy a zero dep. add-on cover.
Frequently Asked Question
Zero depreciation in bike insurance is an add-on cover which protects the insured bike against the charges of depreciation incurred by the two-wheeler. Since the accountability of the charges of depreciation is levied on the owner of the bike, it is withheld from whatever claim amount that you receive from the insurer during settlement of the claim. But, if you have a zero depreciation add-on, you get exempted from making this payment.
To decide the best zero depreciation two wheeler insurance in India actually depends on the policy seeker and their requirement, budget etc. Most insurance providers allow the insured with zero depreciation add-on cover to procure up to 2 claims. But there are few companies that allow the insured to avail unlimited zero depreciation claims. These companies are:
- IFFCO Tokio General Insurance
- Royal Sundaram General Insurance, and
- The New India Assurance
No, you cannot convert a third party bike insurance plan into a zero depreciation insurance. This is because a zero depreciation cover is an add-on and not a proper insurance policy. So, it can be opted with a comprehensive or a standalone own-damage bike insurance plan and not as a replacement to a third-party plan.
A zero depreciation cover for bikes allows protection against the depreciation expenses that every bike owner who does not have this add-on has to pay during claim settlement. Under this add-on, the insured gets reimbursed for depreciated parts' repair and replacement at claim settlement. The add-on allows 100% protection against the depreciation costs of all bike parts except a few such as tyres, tubes and batteries (covered at 50%) etc.
Yes, a bike owner should purchase a zero depreciation bike insurance. This is because it insures your bike against the depreciation charges at a nominal extra premium price. Thus, it allows the insured to receive a raised claim from the insurer.
Though a zero depreciation add-on for bikes is not a compulsory requirement for every bike to have like the third-party insurance. However, this add-on is recommended as it helps the insured to enhance its claim amount by saving on the depreciation charges that the insured has to pay otherwise.
A zero depreciation bike insurance cover is an add-on coverage that can be bought with another bike insurance policy such as a standalone own damage policy or comprehensive policy. It is not a complete bike insurance plan in itself. On the other hand, comprehensive bike insurance is a proper bike insurance plan with which the insured can opt for a zero depreciation cover.
A zero depreciation add-on cover for bikes will not allow the insured to receive 50% protection costs against batteries, tyres, and tubes of your bike. In addition, damages that are caused because of any mechanical failure are also not covered. Other uninsured parts under this cover are gas kits and bi-fuel kits.