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Learn How Depreciation Affects Your Two-wheeler Insurance Online Policy

By Vikas Chandra Das
11 October 2022, 10:53 AM

All goods decrease in value with time; the same goes for your two-wheeler. The market value of bikes decreases, and the add-on zero dep insurance can be taken along with your comprehensive insurance or standalone own damage insurance online to protect you from the high costs you can incur if you claim depreciation. Let us understand how depreciation affects your bike insurance online premium.

It is highly advised to compare different two-wheeler insurance plans and the benefits of various additional covers to find the best option. One of the significant factors that have a substantial impact on the premium of your bike insurance online is the depreciation charge. Before, in order to fully wrap our head around depreciation charges, we must know what IDV or insured declared value means.

IDV is the maximum amount the insurer will reimburse for any bike loss or damage in any unfortunate event or accident for a comprehensive or standalone own damage bike insurance. IDV, in simple terms, also refers to the market value of your two-wheeler, which is calculated after considering the annual depreciation of your two-wheeler. 

Factors That Affect the IDV 

  1. IDV depends on the bike's age, type, specialities, features, and model. For example, if your two-wheeler is well-equipped with high-end features, the IDV of the bike will be higher.
  2. IDV also depends on the type of fuel used by your two-wheeler.
  3. The place of purchase also affects your two-wheeler IDV value.
  4. This clearly states that if there are two same two-wheeler models with varied years of manufacture, both bikes will have two different IDVs.
  5. IDV also depends on the kind and value of accessories attached to your vehicle.

Importance of Depreciation In Bike Insurance Online Policy

It is highly critical to understand the depreciation value of your two-wheeler as it mitigates the premium you pay towards your insurance plan and reduces the IDV. It can be said that the rate of depreciation of your two-wheeler is thus inversely proportional to the IDV.

A high depreciation rate of your two-wheeler leads to a lower IDV. If you purchase the zero depreciation coverage with your comprehensive bike insurance online plan, you can lower your bike's depreciated value and various components.

As your bike ages, the rate of depreciation increases and lowers the IDV. This eventually impacts the premium of the bike insurance online policy. This clearly means, as the bike gets older, the premium decreases, but in the case of any claim made by the insured, the claim value is also decreased because of the low value or IDV of the bike.

How to Deal with Depreciation in the Case of Bike Insurance Online?

You can opt for zero depreciation cover to take care of the depreciation. This will result in a slight increase in your premium amount for your insurance, but this little investment can also protect your bike value from depreciation. This means higher claim amounts and a better market value for your vehicle. While purchasing depreciation insurance, you should consider the factors mentioned below:

  • Zero dep coverage is also named add-on bumper-to-bumper coverage by some insurance companies.
  • The zero depreciation bike insurance online add-on is an optional add-on and if not purchased with a base comprehensive or standalone own damage plan, is not added by default.

Why Buy Zero Depreciation Coverage?

  • This add-on provides extensive coverage: - With the help of depreciation coverage, you will enjoy an IDV almost equal to the market price of your two-wheeler. It allows you to enjoy better coverage.
  • You can save a significant amount: - As the insurer pays for the repair of the two-wheeler regardless of the depreciation rate, you can benefit from a higher claim amount. It reduces the amount you have to pay to repair your bike out of your pocket.
  • Enjoy peace of mind: - Repairing damaged components on your newly purchased luxury bike can be pretty expensive. With zero depreciation coverage, you can enjoy peace of mind knowing that the insurer will cover you regardless of the depreciation.

Read more -  Does Depreciation Impact the Premium Cost of Your Two-wheeler?

The Determination of Depreciation of Your Two-wheeler

The age or number of years of a bike is directly proportional to the two-wheeler's depreciation rate. The rate of depreciation of the bike is as follows:  

Age of the Two-wheelerRate of Depreciation without Zero Depreciation Cover 
Below 6 months0% 
Between 6 months to a year5% 
Between 1 & 2 years10% 
Between 2 & 3 years15% 
Between 3 & 4 years25% 
Between 4 & 5 years35% 
Between 5 &10 years40% 
More than 10 years50% 
Bike Part

Depreciation Rate

without Zero Depreciation Cover

Depreciation Rate

with Zero Depreciation Cover

Parts made of glass100%0%
Rubber or nylon or plastic parts or tyres and tubes, paintwork, batteries, and airbags100%50%
Parts made of fibre glass100%30%


This is clear from the above discussion that the depreciation rate of your bike annually strongly impacts the IDV or the insured value of the bike. This means that the IDV decreases each year, reducing the claims amount, indemnity ceiling, and the premium of your online insurance.

However, this isn’t a perfect situation since this will result in the overall reduction of your bike’s value. You can stop this from happening if you purchase an add-on with your standalone own damage or comprehensive bike insurance online plan - zero depreciation coverage. This will eventually enhance your premium but will not affect the compensation or claim value of the two-wheeler.

Read more - What Impacts Your Two-wheeler Insurance Policy


1. What happens to the IDV if the bike is sold to someone else?

If you sell your bike to someone else, who either gets the policy from you or buys it separately, the IDV of the bike will be as per the prevailing market value. 

2. What is not covered by zero depreciation two-wheeler insurance?

Zero depreciation bike insurance provides 100% coverage for all fibre, rubber, and metal parts without deductions. Engine damage caused by water infiltration, mechanical breakdowns, oil changes/leakage, or consumables is not covered.

3. When is the zero depreciation two-wheeler insurance valid for two-wheeler insurance online?

Zero dep on bike insurance online is no longer available after 5 years

4. How many times can you claim zero depreciation two-wheeler insurance?

You can claim zero write-off car insurance a maximum of 2 times during the term of your bike insurance online.

5. What happens if you don't take zero depreciation two-wheeler insurance?

Without zero depreciation coverage, all insurers will account for depreciation on the parts of your bike and, therefore, only pay you your claim after deducting the depreciation amount. 

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