Introduction
The Insured Declared Value of your bike keeps reducing with time owing to the depreciation accumulated on its parts due to age and usage. When you file a claim on your bike insurance policy, you do not receive the entirety of the cost of the damaged parts as compensation. If you wish to receive the entire value of the damage or loss caused to your bike, then you can add a Zero Depreciation Cover to your Comprehensive Bike Insurance Policy.
If you opt for a Zero Depreciation Bike Insurance Policy, any damage to your bike's components or a total loss of the bike due to irreversible damage or theft will be covered and you will receive the total IDV of the damaged parts.
What Is The Depreciation For Two-Wheelers?
The rates of depreciation for two wheelers have been determined and announced by the Insurance Regulatory Development Authority of India (IRDAI). The aforementioned rate is dependent on the age of your bike.
Here is a table depicting the rates of depreciation on two-wheelers after the different amounts of time pass-
Age of the Two Wheeler |
Depreciation Applicable |
0 to 6 months |
Nil |
6 months to 1 year |
5% |
1 year to 2 years |
10% |
2 years to 3 years |
15% |
3 years to 4 years |
25% |
4 years to 5 years |
35% |
5 years to 10 years |
40% |
More than 10 years |
50% |
The different components of your bike depreciate at different rates. These rates, as defined and shared by the IRDAI, have been presented in the following table.
Two Wheeler Components |
Depreciation Applicable |
Nylon, Rubber, Batteries, Tyres, Tubes, and Plastic Components |
50% |
Fibreglass Components |
30% |
Other components made from glass |
Nil |
Regular Bike Insurance vs Zero Depreciation Bike Insurance
By opting for Zero Dep insurance for a bike instead of a regular bike insurance policy, you can enjoy an enhanced coverage for the vehicle. The following table highlights how Zero Depreciation Two-Wheeler Insurance is a better option for your bike than a regular insurance policy without a zero depreciation cover.
Criteria |
Zero Depreciation Insurance For Bike |
Comprehensive Bike Insurance Policy |
Claim Settlement |
If you have a Zero Depreciation Bike Insurance Policy, then you shall be eligible to receive the total value of the damaged components of the bike or the Insured Declared Value of the bike (in case of theft or irreversible). |
If you have a Comprehensive Bike Insurance Policy without a zero depreciation cover, then you will receive the value of the damaged components of your bike after a reduction for the depreciation accumulated on those components. |
Premium |
Although the premium for a Zero Depreciation Bike Insurance Policy is higher than that of a Comprehensive Bike Insurance Policy, the associated benefits provide you with better coverage for your bike. |
The premium for a Comprehensive Bike Insurance Policy is lower than that of a Zero Depreciation Two Wheeler Insurance Policy. |
Repairing expenses for Plastic Fibre |
With a Zero Dep Bike Insurance Policy, you get coverage for the damage caused to the parts of your bike that are made from plastic or fibre. |
With a Comprehensive Bike Insurance Policy, you do not get coverage for the damage caused to the parts of your bike that are made from plastic or fibre. |
Inclusions of a Two Wheeler Insurance Policy with Zero Depreciation Cover
The precise list of inclusions may vary from one cover to another. But a standard two wheeler insurance plan with zero depreciation cover typically includes the following:
Coverage for the cost of repairs or replacement
Coverage for depreciable parts made from nylon, rubber or plastic
Coverage for partial damages to batteries or tyres
You can avail the zero depreciation cover when you buy or renew your two wheeler insurance plan.
Exclusions of a Two Wheeler Insurance Policy with Zero Depreciation Cover
It is also essential to be aware of the exclusions in a two wheeler insurance plan with zero depreciation cover. Some common exclusions are listed below.
Any expenses related to uninsured damages
Damages that arise due to mechanical faults
Damages and repairs due to routine wear and tear
Total damage or loss of the two wheeler
Applicable Rate of Depreciation on Two Wheeler Parts
The depreciation rates for two wheeler parts depend on the material they are made of. Here are the rates applicable.
Two Wheeler Parts |
Depreciation Rate |
Tubes and tyres |
50% |
Parts made of nylon, plastic and rubber |
50% |
Parts made of fibreglass |
30% |
Parts made of glass |
0% |
How To Purchase Zero Depreciation Bike Insurance Cover?
Purchasing zero depreciation bike insurance cover is fairly easy online. You need to purchase the cover along with your base policy. Alternatively, you can also purchase it at the time of policy renewal. Here is a step-by-step guide to help you with this.
Step 1: Visit the website of your preferred insurance provider.
Step 2: Select the two-wheeler insurance policy that you intend to buy.
Step 3: Fill in the personal details and the details about your vehicle as required by the insurer.
Step 4: Select the Insured Declared Value (IDV).
Step 5: Choose the zero depreciation cover as an add-on to your two wheeler insurance policy.
Step 6: Take a look at the insurance premium and make the payment online.
Step 7: You will then receive your insurance policy document along with the add-on cover in your email ID right away.
What are The Benefits of Zero Depreciation Bike Insurance?
There are several benefits of opting for Zero Depreciation Insurance for your bike. Some of these benefits have been discussed below.
1. Enhanced Coverage For Your Bike
With a Zero Depreciation Cover for your bike, you can get extensive financial protection for your bike. In addition to this, you can claim the cost of the damages caused to the parts of the bike that are made from plastic and fibreglass.
2. Higher Claim Amount
If you buy a Zero Depreciation Bike Insurance Policy, then you can get a higher amount on the settlement of your bike insurance claims. This is because the insurer will not deduct the amount of the depreciation accumulated on the damaged parts of the bike.
Although a Zero Depreciation Two-Wheeler Insurance Policy enhances the coverage of your bike insurance policy, it also has an additional cost associated with it. If you include the Zero Depreciation Cover in your bike insurance policy, then you will end up paying a 10 to 15% higher premium than a regular bike insurance policy.
What is the Cost of A Zero Depreciation Cover? What Makes it Worth the Price?
The exact price of a zero depreciation cover varies from one policy to another. Broadly speaking, however, the price of a zero depreciation add-on can range from 10% to 15% of the total policy cost. This may seem like a significant portion, but it is worth it to include a zero depreciation cover in your policy, because of the benefits the add-on offers. In case of a claim, you can receive the entire amount without any depreciation cuts whatsoever, making the cost of the add-on worth it.
Things to Keep in Mind About the Zero Depreciation Add-on Cover?
Before you decide to purchase a zero depreciation add-on cover, you need to keep the following things in mind.
You can only get this add-on cover for bikes that are not more than 2 years old
Claims on this add-on cover are only allowed a certain number of times in a year
The zero depreciation cover does not account for any compulsory deductibles included in your plan
This add-on cover is also known as the bumper-to-bumper cover in some policies
What are the Conditions to Avail Zero Depreciation Add-On Cover?
The terms and conditions to avail a zero depreciation add-on cover will depend on your policy. Generally, the following conditions may need to be satisfied.
The two wheeler should not be older than 2 years
The vehicle should be stolen or entirely damaged
The two-wheeler should be repaired in a network garage only
The annual limit on the number of claims under this add-on cover should not be exhausted
To Sum It Up
It is advisable to add the Zero Depreciation add-on cover to your bike insurance policy to have a higher degree of financial protection for your bike. A Zero Depreciation Bike Insurance Policy essentially negates the impact of depreciation on your bike insurance claims.
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