Need of Zero Depreciation Cover in bike insurance

Zero Depreciation Cover in bike insurance!

Whenever you purchase a new and expensive bike, you make sure to protect it from extreme damages. We cannot predict damages or accidents. Whether you are an experienced driver or a fresher one, it will not change the circumstances of the accident. So, it is better to be on the safer side and choose additional coverage. In that case, a zero depreciation cover is worth an investment for the protection of your bike. The insurance company will pay the complete cost of the bike without considering depreciation. So, purchasing a zero depreciation two-wheeler insurance is very helpful for every bike owner.

A comprehensive bike insurance policy is always there to provide coverage but it considers the depreciation amount. Depreciation reduces the actual amount of the vehicle hence the insurance company ended up paying the recent market price of the bike.

Benefits of Zero Depreciation cover:

Opting a zero depreciation policy is always beneficial. Here are some major benefits of opting a Zero Depreciation cover.

  • It will increase the savings and reduce the risk at the time of claims. Bike owners don’t have to pay much from their pockets at the time of making a claim.
  • The car owner will receive the complete amount including depreciation amount and after deducting some required amount in the policy.
  • Generally, the depreciation rate of two-wheelers varies from 0% to 40%. But with a zero depreciation plan customers don’t have to pay for the expenses of paintwork, rubber, and fiberglass parts at the time of service.
  • Customers have to pay 0% charges for the repair and replacement of spare parts whereas you have to pay 50%. charges for tubes, tires, & batteries.
  • If you own an expensive bike then it is also obvious that their spare parts are also expensive. So, people with expensive bikes majorly own this coverage while renewing bike insurance online.
  • Opting for a zero depreciation cover while purchasing two-wheeler insurance for your new bike will give your peace of mind. As you don’t have to take any financial stress in repairing the damage.
  • It widens the coverage of your bike in extreme damage conditions.

What is Zero Depreciation Cover?

Zero depreciation cover is an add on provided in two-wheeler insurance policies. It provides additional benefits to the cost of bikes by neglecting depreciation costs. It is obvious that the vehicle price will depreciate with passing time due to wear and tear. So, opting for a zero depreciation cover along with the basic plan is a wise decision. You have to choose this as add on while purchasing the bike insurance online. Most of the insurance companies provide this coverage option for new bikes of less than two years. The premium price will increase on opting zero depreciation for which you will receive a high claiming amount. Customers can opt for this cover both while purchasing or renewing Online Bike insurance.

Scenarios excluded under Zero Depreciation Cover:
  • If the bike damages due to mechanical defects then it will not be covered in the policy. 
  • Parts that are not mentioned in the policy will be covered in a zero depreciation policy. 
  • If the bike damages due to natural hazards then it will not be covered under the policy.
  • Damages caused due to mechanical wear and tear are not included in the policy.
  • It is important to go through the policy documents carefully as zero depreciation covers are only applicable for selected models.

Comprehensive Plan Vs Zero Depreciation Bike Insurance Plan-What is Better?

Comprehensive Plan Vs Zero Depreciation Bike Insurance Plan

It is not an easy task to compare two different insurance policies. Especially when it comes to Comprehensive vs zero depreciation in bike insurance. Both plans have their separate advantages and drawbacks. If you exclude any of these then you must have to suffer financial harm. These plans complement each other and provide combined protection to the bike. Overall, we can easily understand it by saying that Comprehensive Insurance + Zero Depreciation Bike Insurance = Complete protection and 100% Peace of Mind.

  • If you have purchased a new bike then a zero depreciation cover is suitable for complete protection. Whereas you own an old bike then a Comprehensive plan is enough to shield you.
  • Customers have to pay a high premium for choosing zero depreciation covers in a bike insurance plan. Comparatively, a comprehensive plan has low annual premiums
  • You can cover your bike in depreciation cover for a certain period of time. That time depends upon the insurance company, model, and variant of your bike. Most of the companies take it within two years of purchasing a bike. On the other hand, comprehensive plans are available for all types of two-wheelers.
  • The market price of bikes reduces with the passage of time. Hence, comprehensive cover will deduct the Depreciation cost of the parts while providing a claim. Customers can take a claim up to a specific amount for the predefined damages. You can find the list of damages in the policy document. The company will deduct all the taxes and charges before giving the claim. But on the other hand in Zero Depreciation cover, you will get the whole amount after reducing some compulsory deductions.

Role of zero depreciation cover in Comprehensive policy:

We have heard that a comprehensive plan provides the best protection against damages. But there are some exceptions in every case. So, there are certain scenarios where this comprehensive plan fails and customers don’t get the appropriate benefits.

  • A comprehensive cover is perfect for the reimbursement of damages for a well-used bike. It pays the expenses of repairing and replacement of bike parts as per current market value. Altogether, we can say that the insurance company will cut off the depreciation charges before settling the claim. But what happens if your newly purchased bike met with an accident and got damaged within a few days after purchasing. You have to pay the repairing bills disappointingly. Also, at that time a well-equipped comprehensive plan will be of no use and you have to pay money from your pocket. This damage will cost you too high.
  • Customers can protect themselves from this type of incident by opting for a zero depreciation cover at the time of purchasing basic bike insurance policy. When you purchase an insurance plan, you take it for financial protection as well as for mental peace. So, ignoring a zero depreciation cover while purchasing or renewing online bike insurance proves to be very disappointing.
  • As per the strict rules of government, it is important to have third party liability coverage for all the motor vehicles. So, purchasing a comprehensive plan with third party liability coverage is necessary to pay for the social losses.

Coverage provided in a Comprehensive Insurance policy: 

  • Comprehensive Insurance policy is a complete package of repair and hospitalization benefits. It will pay for the bodily injury, social property damage as well as for the damage of the vehicle. 
  • Comprehensive Insurance policy will cover all the major and valid reasons for damage. It includes accidents such as theft, accidents, riots, fire explosion, natural disasters, and terrorist activities.

Exclusions in Comprehensive Insurance policy:

There are some scenarios that are not covered in the Comprehensive bike Insurance policy:

  • Customers will not be able to make a claim after the expiry of the policy.
  • If the policyholder is riding a bike under the influence of alcohol, drugs, or any chemical then it will not be covered in the policy.
  • The insurance company will not consider the accidents or damage that are planned intentionally.
  • If you are using your personal vehicle for commercial purposes, then it will not be covered in the comprehensive policy.

Coverage provided in a Zero Depreciation Insurance policy

Zero Depreciation Two-Wheeler insurance plan is purchased by the owners of a new bike. This coverage does not deduct the amount of wear and tear of bike parts. 

  • Depreciation simply means the reduction of the market price of a bike due to wear and tear with the passage of time. Once you purchase the bike the depreciating amount starts to reduce. And it reduces till you use the bike.
  • In Zero Depreciation coverage, customers will get the total insured amount including the depreciation cost of the bike.
  • Customers don’t have to pay charges for repairing or replacement of most of the parts.

Exclusions in Zero Depreciation Insurance policy:

  • The insurer will not consider any type of wear and tear damages on the bike.
  • Zero Depreciation Insurance policy will consider selected parts for replacement at no charges. The company will take help price for other parts.
  • Natural calamities resulting in the damage of the bike are not covered in the policy.
  • Zero Depreciation Insurance policy covers only selected models of bikes that are expensive. If the age of your bike is more than 5 years then you cannot choose for Zero Depreciation cover while renewing the insurance plan. This timeline further varies from company to company.
  • Searching for a Best Insurance Policy through an offline method is very difficult hence customers can check Two-wheeler insurance online to get more benefits and advantages.