Bikes have several components, such as fibre parts, for which you need coverage under your two-wheeler insurance policy. So, if you have bought a comprehensive or standalone own damage insurance policy, you are assured of coverage against damage to fibre parts of your bike. However, if you have a third-party liability policy only, you are not covered against this damage. You can either buy a standalone own damage plan separately or upgrade your third-party plan to a comprehensive policy to get covered against fibre part-related damages to your bike.
However, a bike insurance policy does not allow full claims on iron, aluminium, metal, or fibre parts, which leads to a heavy burden on the vehicle owner's pocket after damage. It is due to the depreciation that takes effect with time. So if you want full coverage for that, you should add a zero depreciation add-on cover to comprehensive bike insurance.
What does Zero Depreciation Bike Insurance Mean?
There are mainly three types of bike insurance: standalone own damage insurance, third-party insurance, and comprehensive insurance. But the zero depreciation cover is available under a comprehensive bike insurance policy and a standalone own damage policy. So, if you only have a third-party liability insurance policy, you cannot get the zero depreciation cover.
As we all know, depreciation is the reduction of value due to the wear and tear of any asset, which increases as time passes. Thus, insurers also reduce this value while settling a bike insurance claim. But when one buys a zero depreciation add-on cover to either a comprehensive or standalone own damage policy, the insurer will not deduct the vehicle's value. With these add-ons covered, the cost of repairing or replacing depreciable parts like fibre, metal, aluminium, etc., is fully covered. As a result, policyholders can escape from heavy expenses.
What are the Benefits of Zero Depreciation Add-on Cover?
Zero depreciation two-wheeler insurance benefits a person with a brand new vehicle. With a zero-dep policy, a policyholder does not need to bear the depreciation cost of various parts. This zero depreciation add-on cover allows full coverage of rubber, nylon, fibreglass, plastic, and several other parts of a vehicle. This additional coverage allows for more savings than a general comprehensive two-wheeler insurance policy.
Depreciation Rates of Bike Parts
Below is the depreciation percentage of various bike parts that the policyholder bears without zero dep motor insurance.
|Depreciable Bike Parts||Applicable Depreciation Percentage|
|Nylon, plastic, and rubber Parts||50%|
|Battery, tube and tyres||50%|
For instance, suppose you meet with a mishap and find out that you need to replace plastic parts. In that case, the insurer only pays 50% of the amount, and the policyholder will bear the remaining percentage. But if you have already bought bike insurance with zero depreciation add-on, the insurance company will bear the entire expense, except for batteries, tube and tyres. Here, the cover will apply for only 50%.
Moreover, the rate of depreciation depends on the vehicle's age. The table will help you to understand better.
|Age of Two-Wheeler||Depreciation Percentage|
|Upto 6 months old||No depreciation allowed.|
|Above 6 months and upto 1 year||5%|
|Above 1 and upto 2 years||10%|
|Above 2 and upto 3 years||15%|
|Above 3 and upto 4 years||25%|
|Above 4 and upto 5 years||35%|
|Above 5 and upto 10 years||40%|
|Above 10 years||50%|
Zero Depreciation Cover - Exclusions
Even the best two-wheeler insurance policy comes with some exclusions. So, the following are some excluded points under zero depreciation add-on cover.
- It is not available for vehicles that are older than five years. However, this norm can differ from one insurer to another.
- A zero depreciation bike insurance policy allows only two claims during a policy period.
- Machine-driven breakdown damages are not covered.
- No claim settlement allowed for the damage of items like the gas kit, tires, etc., because they are not insured under this bike insurance add-on cover.
- General wear and tear of depreciable parts that require replacement or repair are unavailable.
- No settlement is available for the damage by an uninsured risk.
What is the Best Time to Buy Zero Depreciation Two-wheeler insurance Add-on Cover?
Hopefully, these points help you to understand things better, and if you are planning to buy zero depreciation two-wheeler insurance, you should buy it at the time given below:
- A person should buy zero dep insurance if they own a brand new or expensive bike.
- It is essential to buy it if a person resides in a heavily trafficked or accident-prone area.
- As discussed, this cover is available only for a vehicle up to five years old; thus, one needs to buy this insurance if their vehicle is not older than five years.
- One should buy a zero-depreciation add-on cover if they do not want to pay a hefty garage bill on depreciable parts.
Read more - Which is Better: Comprehensive or Zero Dep Two Wheeler Insurance Policy
Sometimes damage to depreciable parts burdens the policyholders with tall expenses involved in their repairs. But comprehensive insurance with add-on zero dep insurance for bikes allows extra coverage that prevents you from bearing the depreciation costs. There are various bike insurers in India, but with Paytm Insurance, you can buy policies that are high on benefits and low in price. Paytm Insurance is a leading aggregator of top-class bike insurance policies. It matches feature-rich insurance policies with unbeatable prices and shows them to you in a lucid interface.
Read more - Common Misconceptions About Zero Depreciation in Two-wheeler Insurance