Before getting into the zero depreciation coverage, let’s first understand bike insurance. Just as a mediclaim protects your life and takes care of your medical expenses, two-wheeler insurance safeguards you and your vehicle.
You can get a third-party plan that is mandatory in the country. It protects your financial or legal liability towards the third party in case of any misfortune. However, the third-party plan does not guard the insured. Also, there are no add-on benefits in a third party bike insurance plan.
Then there is a comprehensive two-wheeler insurance plan that safeguards the insured, its vehicle, and any legal or financial liability arising in any mishap towards the third party. It also provides add-on benefits such as zero depreciation cover to the insured.
Understanding zero depreciation cover
Depreciation is the reduction in the value of one’s bike over time due to its wear and tear.
If one has brought comprehensive insurance plans with no depreciation cover, in such case, if you make a claim, you will not get the insured value; instead, you will get the depreciated value.
If any plastic, nylon, or rubber part requires to be altered or is damaged, 50% of the total expense will be reimbursed by the insurance company, and 50% needs to be paid by the insured.
If any part involving fibre demands to be modified or is damaged, the insurance company will bear 70% of the expense, and 30% will be paid by the insured.
If any part involving metal or wood needs to be changed or is damaged, its depreciation will be calculated as per the vehicle’s age.
Benefits of bike insurance with zero depreciation cover
If one purchases bike insurance with depreciation coverage, in such a case, if a claim is made, one need not worry financially. The insured does not need to pay from their pocket above mentioned 50%, 20%, or any other depreciation cost.
The depreciation caused will be zero for the insured, and the insurance company will bear all the expenses.
Who is eligible for a zero depreciation cover?
Anyone who has invested in a comprehensive bike insurance plan has the opportunity to take an add-on depreciation cover. The zero depreciation cover option is not provided to those who have taken only third-party liability insurance plan.
When can you purchase a zero depreciation cover?
You can invest in a zero depreciation cover till your vehicle is five years old. If your bike is over five years old, you cannot get a zero-dep cover.
Insurance claim process
If you have purchased the zero depreciation add-on cover, you can claim its benefits only twice a year. If a third-time claim is made in a year, then the standard comprehensive bike insurance rules will be applied.
Do I need to pay anything despite zero depreciation coverage?
- Consumable cost, such as the cost of nut, bolt, and oil, is not covered under zero depreciation cover.
- Deductible expense is also not covered; the insured must pay a pre-decided amount in case of a claim.
- The insurance company deducts the salvage value. However, the insured has the right to keep the damaged parts that can be sold in the market, and thus the salvage value can be recovered later.
Depreciation reduces the actual value of your vehicle. When you make a claim, you won’t get the value; you get the depreciated value. Giving extra premiums and obtaining zero depreciation add-ons is a promising idea for the insured, as you get full coverage for your bike parts in case of an accident. After deducting some compulsory deductions, you will get the actual value of your claim.