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Is Zero Depreciation Bike Insurance Worth It?

By Bajaj Markets - Dec 31,2019
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Need a Zero depreciation bike insurance

Over time, the value of our purchases reduces due to a host of factors, wear and tear and due to usage being one of them. This phenomenon of the value being reduced is known as depreciation. Bike insurance or two wheeler insurance is mandatory for everyone in India, and a hefty fine is levied if a two wheeler is found to be uninsured.

About Depreciation in vehicles

Parts like tyres, tubes, batteries, other plastic parts, and materials made out of fibre are the ones depreciation is usually factored in for. The government, through the Insurance Regulatory and Development Authority (IRDA) has created guidelines for depreciation, with applicable depreciation ranging from 30 percent to 50 percent for the aforementioned parts. In addition to this, the depreciation rate for all other parts is ascertained based on years of ownership. The following table lays it out clearly:

Number of years the vehicle has been owned The rate of depreciation applicable
From zero to six months No depreciation
From six months to one year 5 percent
From one year to two years 10 percent
From two to three years 15 percent
From three to four years 25 percent
From four to five years 35 percent
From five to ten years 40 percent
Ten years and beyond 50 percent

So, for example, if Jaideep’s bike was in an accident, was three years old, and a lot of fibre parts were damaged, there will be a thirty-odd percent depreciation factored in for the fibre parts, and twenty-five percent depreciation factored in for the rest, based on how old the bike is. So, he will end up paying a substantial amount of the repair costs.

What is zero depreciation bike insurance?

Zero depreciation bike insurance, as the name suggests, is a type of insurance cover, that overlooks the cost of depreciation while processing claims. Insurers always factor in depreciation while making payouts, and if there is some damage, the owner of the bike is not paid the full amount – there is a slight deduction to factor in depreciation.

In the case of zero depreciation bike insurance, however, depreciation is not factored in. The amount in the claim is paid in full, some of which, in the case of normal insurance cover, would otherwise have to be borne by the policyholder.

Do I need insurance for my bike?

In 2018, the Insurance Regulatory and Development Authority (IRDA), through the Motor Vehicle Act, made it mandatory for all individuals who own vehicles to get at least a third-party insurance cover, which makes a two wheeler insurance mandatory. While third party insurance does not cover the rider of the bike, it does cover a person involved in an accident with the bike.

There is a fine of around two thousand rupees along with imprisonment for up to three months in the case of fresh offenders (first time). For the second offence, the punishment is bumped up to four thousand rupees and imprisonment of up to three months.

So, yes, an insurance is mandatory by law. What helps when you are getting two wheeler insurance is getting zero depreciation bike insurance. Read on to understand why!

Is zero depreciation bike insurance worth it?

Zero depreciation bike insurance has many benefits:

  • You need not worry about out of pocket expenses that won’t be covered later. You end up shelling out little to no money because depreciation isn’t factored in at all.
  • Most zero depreciation bike insurance policies offer complete coverage on almost all parts, ensuring comprehensive coverage.
  • There are wide networks of partner garages that the vehicles can be taken to for repairs.

All of the above make zero depreciation bike insurance a great choice to ensure you do not lose money in the unfortunate event of an accident or if your bike breaks down. When compared to other covers, like comprehensive insurance, you almost always still have to shell out some money. While the name comprehensive indicates that everything is covered, that is seldom the case, with individuals always having to pay a part of the costs themselves.

If you are looking for great insurance coverage for your two-wheeler, you should consider the two wheeler insurance available on Finserv MARKETS. There are more than 100 million happy and satisfied customers, the claims are cashless and service is easy at one of any 4,000 partner garages, the whole process is straightforward and has no third parties involved, and renewal is easy to sort out online!

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.


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Bajaj Finserv Direct Limited ("BFDL") is primarily engaged in distribution of financial products and services through its digital platform (“Bajaj Finserv MARKETS”) and inter alia renders services of customer acquisition, providing preliminary credit support activities, fulfilment services and post-acquisition customer services to Banks, NBFCs, HFCs. BFDL is also a registered Corporate Agent (Composite) under valid IRDAI registration number: CA0551 valid till 10-Apr-2024 for solicitation and servicing of Insurance Products. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522