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Bumper to Bumper Car Insurance: Cover Every Part of Your Car!

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Car insurance is primarily of two kinds, third party policy, which comes with only third-party damage cover and comprehensive policy, which also covers the damages to your own vehicle along with other people’s damage. A comprehensive car insurance policy is slightly more expensive than a third-party policy, but it is a much better choice than third party car insurance policy because of the all-round cover it offers. Even in a comprehensive policy, you get a number of variations and add-ons. One of these is the bumper to bumper cover.

What is Bumper to Bumper Cover in Car Insurance?

In a comprehensive policy, the insurance company deducts depreciation and some components are only covered to a limited amount. The advantage of a bumper to bumper policy is that it covers everything on the car, be it made of glass, plastic, metal, fibre or rubber. It is also known as zero depreciation cover.

When you purchase the bumper to bumper policy add on, you will get complete coverage on the vehicle without factoring in any kind of depreciation on it. This is, especially helpful in cases where the car gets seriously damaged in an accident. When you make a claim, you will be given the full amount, subject to any other applicable terms and conditions of the policy.

What is covered in Bumper to Bumper Car Insurance?

As per IRDAI, even when you take a comprehensive plan, your insurance company will deduct a certain amount of the claim as depreciation. This will be from the Insured Declared Value or IDV of the car. The depreciation will be calculated as under:

• 50% depreciation to be deducted on parts made of rubber, nylon or plastic

• 30% depreciation to be deducted on fibre glass components

• If any wooden part is claimed, it should be deducted as per the age of the vehicle where the IDV calculation formula will be applicable

With bumper to bumper insurance, you can completely save all these depreciations. If you take a bumper to bumper policy, none of the above-mentioned depreciations will be charged to your claim and you will get the full amount.

The exclusions of Bumper to Bumper Cover

The bumper to bumper policy does come with certain exceptions and some things may still not be covered in the policy. Most common exceptions to this policy coverage include:

• Regular consumables like engine oil, brake fluid and transmission fluid

• Regular wear and tear of parts like tyres and mechanical components like brake pads and clutch plates

• Batteries are not protected in this cover

• No protection is offered to private vehicles being used for commercial purposes

• Any damage because of water entering into the engine due to driving in waterlogged areas

• This protection does not exempt you from any voluntary deductibles or compulsory deductibles like file charges, etc.

• No protection is offered for unlicensed drivers or for drunk driving

• In some cases, claims may also be denied if it is not raised in certain time limits

Advantages of Bumper To Bumper Car Insurance Policy

• If you have nil depreciation or zero depreciation cover in your car insurance policy, it means that full compensation can be expected for any car loss/damage at the time of claim settlement. The amount is comparatively more than the amount reimbursed under a comprehensive car policy. The reason for this is that the claim amount in a comprehensive car insurance policy will be paid based on the current market valuation of the car after adjusting the value of depreciation.

• Apart from this, there will be certain expenses that the car owner would need to pay from his/her own pocket for the repairs. However, in a zero-depreciation policy, you will get the entire expenses covered under the claim amount.

• Let’s take an example: If your car was damaged and the cost of the repair was Rs 50,000, then you might have to pay anywhere between Rs 20,000 to Rs 30,000 from your own pocket for depreciation on metal/plastic parts. This is not the case in a zero-depreciation policy as the insurer will cover the full repair amount depending on the IDV (Insured Declared Value).

Disadvantages of Bumper To Bumper Car Insurance

Some of the disadvantages of bumper to bumper car insurance are as follows:

• A zero-depreciation add-on cover may be priced a bit higher than a basic comprehensive car insurance policy.

• It does not provide coverage for tyres, tubes and batteries of the car.

• The cover is only available with comprehensive four-wheeler insurance plans and is suitable for cars up to 5 years old.

Difference between Comprehensive and Bumper to Bumper Car Insurance

Features	Bumper To Bumper Car Insurance	Comprehensive Car Insurance
Premium	It is an add-on cover that you can opt for with your car insurance policy by paying an additional premium.	The premium is lesser than bumper to bumper add-on cover.
Compensation	Costs are covered for the complete repair expenses irrespective of the depreciation expenditure.	It does not cover the depreciation cost on the car parts.
Components	Provides coverage for the repair and replacement of fibre and plastic components of the insured car.	Only partial coverage for repair and replacement of plastic, metal, and fibreglass components of the insured is provided.
Car’s Age	The coverage is suitable for cars of up to 5 years of age.	The insurance cover is provided to cars of up to 15 years of age.

Factors to Consider Before Choosing a Bumper to Bumper Insurance

Here are the some of the factors that you need to consider before you opt for the bumper to bumper insurance:

1. Claims per year is limited:

A few insurance companies limit the number of claims you can raise during the policy period. This is to done in order to keep a check on policyholders from raising small claims for every dent. You need to read the policy document carefully and be aware of the cap on claims when you choose the bumper to bumper cover.

2. Add-on Cover expense:

The premium is slightly higher for the bumper to bumper car insurance compared to a Comprehensive car insurance policy. Even though it is expensive, your finances are well protected in case of damages to your car in case of an unfortunate accident.

3. Limited availability:

There age limitation for the vehicle. Insurers do not offer bumper to bumper cover for cars after a certain age. Hence, you need to check the terms and conditions before you choose the add-on cover.

The choice between policy claims and out of pocket expenses

If you suffer an accident, you may become conflicted between making a claim or paying the damage out of pocket. The decision should be made after weighing in multiple factors like:

1. How much is the expected bill?

First and most important is the expected repair cost. In case of minor damages or fender benders, you are always better off paying from the pocket. The car insurance claim process and charges may end up being too complicated when you can have the matter sorted in a day by paying out of pocket. On the other hand, if major damages occur and you do not want to take the financial hit, you can make the claim!

2. How much is your no claims bonus?

If you have been a good driver and have accumulated maximum no claim bonus (NCB), it is always best to pay out of pocket. This is simply because the claim amount may be much lower than your NCB and you can easily recover your cost on the next renewal.

3. Can you negotiate discounts from workshop by paying in cash?

In many cases, workshops may offer discounts when you do not go through the policy claims and straightaway pay the bill out of pocket. Remember everyone prefers cash today, so try to haggle instead of claiming from the policy.

Bumper to Bumper Car Insurance Cost

The cost and premium of bumper to bumper car insurance is a little higher compared to regular car insurance. The reason for this is that it covers all parts of your vehicle and does not depreciate the value of the parts being replaced while calculating the claim amount. It offers complete coverage and the insurer pays 100% towards the claim raised. Read the policy document carefully before you make a purchase

How to Buy Bumper to Bumper Car Insurance Online

Bumper to bumper insurance coverage can be bought online on www.hdfcergo.com. Similarly to buying a comprehensive insurance cover, you can buy bumper to bumper car insurance. The only difference is you can add this cover before paying the premium for your selected amount. You can also opt for this add-on cover at the time of policy renewal if you have not bought it together with the basic car insurance policy.

Bumper to Bumper Insurance for Used (Second-Hand) Cars

The Zero or Nil Depreciation add-on cover invalidates the depreciation and pays almost 100% of the claim; even though there are some exceptions. For used cars, under the standard Comprehensive insurance you and the insurer must bear the cost to repair your car. However, with the bumper to bumper insurance for used cars, you can claim 100% of the repair cost from the insurance company. Thus, you have an advantage over the comprehensive insurance.

Conclusion

A zero depreciation or a bumper to bumper cover is not an unnecessary expense! You must always choose this cover if your car is no less than three years old or if you are driving a luxury car. It can save you a lot of money and heartache at the claim time.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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