Having a two-wheeler is not merely a matter of convenience but also a matter of responsibility. With uncertain road conditions in many cities in India, the right insurance coverage is essential. Yet, a normal 2 wheeler insurance policy may not be enough to compensate for all the damages. This is where zero depreciation cover emerges. This add-on guarantees you complete reimbursement for repairs and replacements without factoring in depreciation.
So, keep reading till the end to understand the importance of zero depreciation cover for two-wheelers.
Table of Contents
What is Zero Depreciation Cover?
Zero depreciation cover is optional in bike insurance, wherein you get the entire claim value without any depreciation deduction. As a general practice, when a two-wheeler is repaired following a mishap, the insurance company considers the depreciation value of the components replaced and discounts that from the claim settlement value.
This add-on is especially useful for new and high-value two-wheelers, where spare parts can be expensive. So, with the best car insurance or bike insurance, it is possible to get full coverage for repairs without a depreciation cut.
Features of Zero Depreciation Cover
Zero depreciation cover provides several benefits that increase the financial security of two-wheeler owners. Some of its main features are:
- Complete Coverage for Repairs and Replacements
A normal policy deducts depreciation, but zero depreciation provides complete coverage for the repair or replacement cost of bike components. This includes costly parts such as plastic, rubber, fibreglass, and metal components.
- Greater Claim Settlement Amount
Policyholders receive a more significant repayment amount because depreciation is not included in the claim amount, minimising their repair costs.
- New and Old Bikes Can Opt
Insurers permit those who own an old bike to buy this add-on while renewing their policy, even though it is chiefly suggested for newly purchased bikes.
- Restriction on Claims
Most insurance companies limit the number of claims made under zero depreciation cover during a policy’s term. This limit is typically 1 to 2 claims annually.
- Marginally Higher Premium
As the insurer takes on more responsibility, the premium for a zero depreciation cover policy is marginally higher than that for an ordinary bike insurance policy. Nevertheless, the advantage is more significant than the excess cost.
- Includes Costly Spare Parts
Zero depreciation cover is handy for high-value bikes, where repair and spare part costs are very high.
Exclusions from Zero Depreciation Cover
Though zero depreciation cover provides a wide-ranging cover, nothing is covered. Policyholders must know about the exclusions so that they do not face any surprises while settling their claims. Some of the common exclusions are:
- Normal Wear and Tear
The policy does not pay for routine maintenance expenses, service, or wear and tear due to prolonged bike usage.
- Mechanical and Electrical Failures
Problems like engine failure, battery breakdown, or any other electrical and mechanical faults are not included in zero depreciation.
- Uninsured Accessories
The policy does not include aftermarket components, custom-made changes, or optional accessories.
- Claims Exceeding the Stipulated Limit
Zero depreciation cover supports limited claims only. Under usual conditions, your policy will reimburse any claims exceeding the limits after depreciation deductions.
Who Can Avail a Zero Depreciation Cover?
Zero depreciation cover is suitable for some segments of two-wheeler owners, such as:
- New Bike Buyers
If you have a new bike, zero depreciation cover will safeguard your investment from depreciation allowances in the event of accidents.
- Premium or High-End Bike Owners
Luxury and performance bikes have expensive spare parts, so it is advantageous for owners to choose this cover to minimise out-of-pocket costs.
- Regular Riders or Daily Commuters
People who commute daily on their bikes are at greater risk of wear and tear, as well as accidents. Hence, zero depreciation is a good option for them.
- Riders in Accident-Prone Areas
Zero depreciation cover can give you greater financial security if you reside in a city or traffic-congested region with narrow roads and accident hotspots.
- First-Time or Inexperienced Riders
First-time riders or those who have yet to gain confidence riding on the road are prone to minor accidents. Zero depreciation cover makes it easier for them to cope with the cost of repairs.
Final Thoughts
Overall, a two-wheeler is an asset worth protecting to the best of your abilities. While basic policies cover the basics, zero depreciation cover helps you avoid financial losses through depreciation deductions. Although it is slightly more expensive, the advantages, like full claim settlement and lower out-of-pocket expenses, make it a good investment. Whether you are a recent owner of a bike, someone who rides daily, or one with a luxury bike, selecting zero depreciation cover can ensure safety and comfort financially.