What is Zero Depreciation Bike Insurance? - Explained

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-

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.

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.

What are The Benefits of Zero Depreciation Bike Insurance?

There are several benefits 0f 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.

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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