Depreciation is a phenomenon referring to the decreasing value of an asset over a period due to its wear and tear. Like any other asset, the value of a bike decreases every year. As a bike owner, you must bear the depreciation cost even if you have a two-wheeler insurance policy.
When you file a bike insurance claim, the insurance company will, by default, reduce the depreciation cost and pay the balance amount. This is a standard procedure followed by insurance companies worldwide. This often results in lesser compensation from the insurer, and you may have to pay the balance from your pocket.
However, if you have a zero-depreciation bike insurance policy, you can shift the burden of bearing the depreciation cost to the insurer. If you are not sure what it is or how it works, read on.
What is zero-depreciation bike insurance cover?
A zero-depreciation bike insurance cover, is generally available as an add-on or rider. You can purchase this rider by paying an additional premium. However, you can buy this rider only if you have comprehensive bike insurance or a standalone own-damage policy.
It provides 100% coverage against depreciation of all parts of your bike, except tyres and batteries, which are covered at 50%. Typically, most insurers in India allow two zero-depreciation claims during a policy tenure. However, some insurers have no such limitations; you can file unlimited claims.
While zero-depreciation bike insurance coverage is beneficial for all, you must especially buy this if –
- You have purchased a new bike
- You live in the accident-prone area
- You have a luxury/sports/imported bike which has expensive parts
Benefits of biking zero-depreciation insurance cover for two-wheelers
Generally, insurance companies consider the depreciation factor and deduct a certain amount before compensating for your losses or paying for the repair cost. Different bike parts have different depreciation rates. It can also vary based on the age of your two-wheeler. However, by having zero-depreciation insurance for bike, you get the claim amount from your insurer without factoring in the depreciation of the bike parts.
Another significant benefit of zero-depreciation insurance cover for bikes is that it enhances the coverage of your basic policy and reduces your out-of-pocket expenses to zero. Just by paying a small premium for this add-on, you get better savings.
Whether you buy bike insurance online or through an agent, it plays a vital role in giving you peace of mind knowing that you have the necessary financial cushion against damages, losses, and injuries you may suffer due to an accident.
Exclusions under zero-depreciation bike cover
The following conditions are not covered under zero-depreciation cover
- Loss due to uninsured risk
- Routine wear and tear
- Damages caused due to mechanical breakdown
- Damage caused to specific bike parts like tyres, tubes, gas kits, etc.
Generally, the duration of zero-depreciation add-on cover is one year. You must renew it annually to get the coverage benefits. If you don’t buy the zero-depreciation cover at the time of buying the policy, you can buy it when you renew your insurance plan.
Final Word
A zero-depreciation bike insurance cover is a necessary add-on for all bike owners. It helps you get additional coverage and enhanced savings.
