What is Zero Depreciation in Bike Insurance
2024-10-24 12:09:53Every two-wheeler loses value over time because of regular use and wear and tear. This loss in value is called depreciation. If you don't want the reduced value to affect your bike insurance claim, you can choose a "zero depreciation" cover as an extra benefit with your two-wheeler insurance. You just need to pay a little extra on top of your regular insurance premium.
In this blog, let's know more about Zero Depreciation in bike insurance to help you make informed decisions.
What is Zero Depreciation Add-on?
Zero Depreciation add-on, also known as NIL Depreciation cover, is an additional cover that you can enjoy along with a Comprehensive Two-wheeler Insurance policy. Depreciation is the loss of value in an asset because of use, and that loss of value comes with time. That's why insurance companies subtract this amount when they settle a claim. But with a Zero Depreciation Add-on, your two-wheeler's depreciation is not considered when the vehicle's insurance claim is settled.
Depreciation Rate of Bike - Without and With Zero Depreciation Add-On
| Age of Bike | Without Zero Depreciation add on | With Zero Depreciation add on |
|---|---|---|
| Under 6 months | Nil | 0% |
| 6 months to 1 year | 5% | 0% |
| 1 to 2 years | 10% | 0% |
| 2 to 3 years | 15% | 0% |
| 3 to 4 years | 25% | 0% |
| 4 to 5 years | 35% | 0% |
| 5 to 10 years | 45% | 0% |
| More than 10 years | 50% | 0% |
Depreciation Rates According to the Parts of the Bike
| Parts of Bike | Without Zero Depreciation | With Zero Depreciation |
|---|---|---|
| Rubber/Nylon/Plastic parts | Nil | 50% |
| Tubes and Tyres | 50% | 0% |
| Fibre Glass Parts | 30% | 0% |
| Glass Parts | Nil | 0% |
Benefits of Zero Depreciation Cover in Two-Wheeler Vehicle Insurance
Here are the benefits of getting a Zero Depreciation Cover with your two-wheeler insurance:
- It covers the full cost of parts that wear out and need to be replaced.
- The insurance will pay for all repairs and replacements when you make a claim.
- Some insurance companies also cover part of the battery and tyres without reducing their value.
- You can add a Zero Depreciation Cover when you first buy insurance or when you renew it.
Before you buy a Zero Depreciation Cover, keep these things in mind:
- Ask your insurance company how many claims you can make under this cover.
- Only some two-wheeler models can use this cover without paying extra.
What is Covered with Zero Depreciation Cover?
- It covers parts like nylon, rubber, fibreglass, and plastic when they need replacing.
- It pays for repair and replacement costs when you make a claim.
- Some plans also cover part of the cost of damaged batteries and tyres without reducing their value.
- You can add Zero Depreciation Cover when buying or renewing your bike insurance.
- Different companies allow a different number of claims under this cover.
- Make sure to read the policy, as only certain bike models get zero depreciation without paying extra.
What is Not Covered with Zero Depreciation Cover?
- If the damage occurs from events that are not insured.
- If the damage is caused by mechanical problems.
- Normal wear and tear or ageing of the bike is also not included.
- If there is a total loss or complete damage to the bike, it is not included in the zero dep cover.
- Damage to items like tyres, bi-fuel kits, and gas kits that are also not insured.
When Should You Opt for a Zero Depreciation Cover?
Here are some situations that make it beneficial for you to have zero dep insurance for bike:
- Get Zero Depreciation Cover if you just bought a new bike or are new to riding.
- It's important for luxury bikes since their parts are expensive to fix or replace.
- In a country like India, where there are many road accidents, this cover is useful for all bike riders.
Standard Bike Insurance Vs Zero Depreciation Bike Insurance
Here’s a simple comparison between Standard bike insurance and Zero dep insurance for bike:
| Features | Standard Bike Insurance | Zero Dep Bike Insurance |
|---|---|---|
| Claim Settlement | Based on the age of the vehicle and depreciation value of parts. | Full compensation without considering depreciation at claim time. |
| Premium Cost | Lower premium cost. | Higher premium, but offers better returns in the long run. |
| Repair Cost & Plastic Fibre | The insured pays for repair and plastic parts. | Insurer covers repair and plastic fibre part costs. |
| Age of the Vehicle | Available for all vehicle ages, no age limit. | Covers bikes up to a specific age only (typically newer bikes). |
| Number of Claims | Unlimited claims, based on policy terms. | Limited to a specific number of claims (usually two) during policy. |
Conclusion
Zero Depreciation is a pocket-friendly add-on cover that covers the cost of depreciable parts. The whole repair cost will be paid by the insurer if you have Zero Depreciation add-on cover for your bike. You can buy zero dep cover or renew your existing policy in one place with Square Insurance. With us, you can make the right insurance choices that suit your budget as well.
What is Zero Depreciation in bike insurance?
Zero Depreciation in bike insurance means the insurance company won't subtract the reduced value (depreciation) of your bike's parts when you make a claim.
Why should I choose Zero Depreciation Cover?
Zero Depreciation Cover helps you get full compensation for repairs and replacements without factoring in the wear and tear of your bike’s parts.
Is Zero Depreciation Cover available for all bikes?
No, only certain bike models are eligible for Zero Depreciation Cover. Ask your insurance provider for more details.
Can I add Zero Depreciation Cover at any time?
Yes, you can add Zero Depreciation coverage when you first buy your insurance or when you renew your policy.
What is not covered under Zero Depreciation?
Damage caused by mechanical issues, normal wear and tear, and total loss of the bike are not covered under Zero Depreciation.
