5 Benefits of Zero Depreciation Cover for Two-Wheeler

Posted on: Dec 16, 2022 | | Written by:

5 Benefits of Zero Depreciation Cover for Two-Wheeler

Published on December 16, 2022. EST READ TIME: 4 minutes

A two-wheeler is a machine and with time and with usage it is bound to depreciate. Depreciation is the amount of reduction in the value of the two-wheeler which happens due to regular wear and tears over a period of time. When an insurance claim is settled, the depreciation is deducted from the claim amount and then further deductions and calculations are done to arrive at the payable claim amount.

If you wish to get the complete two-wheeler claim without any deduction for depreciation, you should take comprehensive bike insurance with a zero depreciation bike insurance add-on cover. Of all the add-on covers, this is one of the best and undoubtedly, very popular. Let us understand the cover in detail and the benefits it has.

Zero depreciation insurance for two-wheelers

Before we talk about the zero depreciation bike insurance cover in detail, let us first understand what is depreciation. As the bike or the two-wheeler becomes old, there is natural wear and tear, and this reduces the value of the bike. This reduction in value is known as depreciation. This amount is deducted from the claim amount, thus reducing it. But if you have comprehensive bike insurance and not only the mandatory third party bike insurance, you can opt for zero depreciation add-on cover and then the insurer will pay the entire amount without deducting any depreciation. This in simple terms will mean for insurance purposes, the bike or the two-wheeler will be treated as new by the insurance company.

What are the benefits of zero depreciation for two-wheelers?

The zero depreciation bike insurance is a popular cover and opted for many. The simple reason is that it has many benefits which make it the preferred choice. Following are some of the advantages that should be kept in mind:

1. Increases the coverage:

This add-on cover of zero depreciation increases the coverage and reduces the expense that will have to be paid by the insured. The premium increases slightly if you opt for this cover but the coverage increases and the claim amount also increases with no deduction on account of depreciation.

2. Increases claim settlement value:

When you register a claim with the insurance company, during settlement they will calculate the value of depreciation on each of the bike parts. The rate of depreciation and the value will vary from one two-wheeler to the other. The claim is finally calculated and settled on this depreciated value. But with the add-on cover, this reduction does not apply, thus increasing the final payable claim value to the insured.

3. Undepreciated cost of repair:

The cost of repair of any expensive part of the bike is taken care of by the insurance company in case of a zero depreciation add-on cover.

4. Save money:

Though you have to pay an extra premium at the time of buying the add-on cover, the amount you get at the time of a claim is much more, thus, compensating for the extra premium. The compensation that you get with this add-on is more than the premium payable, thus, making it worth the extra expense.

5. Peace of mind:

Bike insurance is there to give peace of mind and financial support at the time of an accident or mishap. With a zero depreciation bike insurance cover, the compensation increases from what it would have been without it. This is because the depreciation is negated. Thus, when you know in case of an unforeseen event causing a loss, you will be compensated completely, gives you more peace of mind.

Besides the above, the following are also some of the benefits of this add-on cover:

● The add-on cover can be easily bought at the time of a new policy or at the time of renewal by paying a slightly higher premium than a standard policy

● There are chances that the insurer provides coverage for partial damage tothe battery and tyre.

● Some models of the bikes can be insured at NIL depreciation without charging any extra amount

Inclusions of two-wheelers zero depreciation insurance plan

When getting bike insurance, you should understand why third party bike insurance is not sufficient. Though it is mandatory everyone should have comprehensive coverage with the right add-ons. Also when you buy a policy you should always know the inclusions and exclusions and specifically the coverage of the add-on covers.

When it comes to the zero depreciation add-on cover, the following are the inclusions:

● The repair and replacement costs at the time of claim settlement are covered.

● The compensation for the depreciable parts is covered in the add-on cover. These include parts of rubber, plastic, nylon, tyre, etc.

● The expense and compensation of the battery are also covered in some policies.

Exclusions of two-wheelers zero depreciation insurance plan

Next, let us talk about the exclusions i.e. what is not covered in the add-on cover when you take it with your bike insurance.

● Any damage or loss that is caused due to a breakdown or a mechanical fault will not be covered in the add-on. The add-on cover only covers damages that are caused due to regular wear and tear.

● Complete damage to the vehicle is also not covered in the add-on.

● Loss or damage due to an uninsured risk

● Damage or loss to the items that are not insured like bi-fuel kits, tyre, etc.

Things to keep in mind about the zero depreciation add-on cover

The following are some of the main things which should be kept in mind when purchasing the zero depreciation bike insurance cover.

● The add-on cover is given by the insurance company to bikes that are not more than 2 years old

● Most policies only allow claims under this twice a year. However, this can vary and must be checked always

● The compulsory deductibles will not be deducted and will be charged as per policy even with the add-on cover

● The bumper-to-bumper cover provides the same coverage as this add-on cover

Conclusion

The main reason to buy comprehensive bike insurance with a zero depreciation bike insurance add-on is to ensure that the bike is secured from any kind of loss or damage and the financial liability arising thereafter. The two-wheeler is completely protected and the compensation at the time of a claim is higher as no amount of depreciation is deducted. This add-on cover is a good value for money and a must-have for all expensive two-wheelers and bikes. Always remember to read the policy document carefully to understand all details and ensure no discrepancy at the time of a claim.

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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