Everyone knows that vehicles, including two-wheelers go through depreciation. If you are new to this concept, you might be wondering what it is. To explain simply, depreciation is the reduction in value due to usage, wear and tear over a duration of time.
This is common phenomena for all vehicles and not limited to a specific type. Depreciation has its impact even on your bike insuranceclaim. It reduces the final amount of claim that is paid to you thereby requiring an out-of-pocket payment. To bypass this problem of depreciation, comprehensive bike insurance plans are offered with an optional add-on called as the zero-depreciation cover.
Under this add-on, the depreciation element on the spares that require replacement is covered by the insurer. Thus, a complete coverage is offered for all the repairs costs required. For instance, if your bike gets damaged in an accident, the entire cost of repairs is covered by the bike insurance policy. Hence using a comprehensive coverage with zero depreciation add-on, you no longer need to worry about out-of-pocket payments.
Here are some of the benefits of zero depreciation cover in bike insurance –
- For starters, you get a comprehensive coverage for the repair costs.
- There is lower out-of-pocket expenses limited to the compulsory deductible of your policy.
- Repair costs reduced at nominal premium prices.
What forms part of zero depreciation cover?
Zero depreciation plan includes coverage for nylon, rubber, fibreglass and even plastic parts. Further, the cost of replacement required for the damaged parts has no incidence of depreciation. Hence, the insurance company reimburses the entire amount of replacement parts without considering the depreciation on these spares. Also, zero depreciation cover is at initial policy purchase as well as two wheeler insurance renewal.
What is not considered under zero-depreciation cover?
Your bike insurance policy mentions the various specifics that are included in its coverage. However, there are a few common exclusions from this add-on cover. Mechanical damages, total damage or theft are some of the cases where no coverage is offered under the zero-depreciation cover. Further uninsured items like tyres, bi-fuel kits and gas kits are also excluded from its scope.
How does a standard bike insurance compare against zero depreciation cover?
The zero-depreciation policy differs on the basis of the following points from a standard comprehensive cover –
Settlement of claim: When it comes to a zero-depreciation cover, the pay-out from your insurance policy is the for all the vehicle spares that either need repairs or replacement without considering the time, i.e. depreciation on them. For a standard cover, depreciation comes into play and reduces the claim amount.
Premiums: The premium for a zero-depreciation plan as compared to a standard policy is higher since it offers a broader coverage for the cost of repairs.
Cost of repairs and fibre spares: In most standard covers, the repair costs are limited in its scope and do not cover the cost of fibre spares. A zero-depreciation plan offers coverage for these expenses too.
These are some ways how a zero-depreciation add-on can help enhance the coverage of your two-wheeler insurance policy. While it is a must-have add-on cover, make sure to make use of two-wheeler insurance premium calculator to assess its impact on the premium. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.