Every mechanical engine goes through depreciation year on year. The same concept applies to your two-wheeler. You buy a brand-new bike, but due to the normal wear and tear, the value of your bike decreases with its age. This is called depreciation.
These days, the cost of repairing the damages due to an accident has become very expensive. Hence, it is important to have such a bike insurance or two wheeler insurance policy that can provide complete coverage against these expensive damage repair bills. Many insurance companies provide ‘add-on’ coverage along with the third-party liability in their insurance plans. The concept of‘Zero Depreciation Cover’ for bikes has become increasingly significant now as it offers coverage against the depreciation.
What is Zero Depreciation Bike Insurance?
In the case of a regular insurance policy, the cost of the repair damage and the replacement of any part like plastic, metal, fiber,etc. are only partially covered by the insurance company. The rest of the depreciation cost is paid by the policyholder. As per IRDA, the rate of depreciation increases year on year with the age of the vehicle, as per the following table:
| Age of the vehicle | Rate of Depreciation |
| 0 to 6 months | 0% |
| 6 months to 1 year | 5% |
| 1 year to 2 years | 10% |
| 2 to 3 years | 15% |
| 3 to 4 years | 25% |
| 4 years to 5 years | 35% |
| 5 to 10 years | 40% |
| Above 10 years | 50% |
Insurance companies have started offering add-on covers along with the third-party cover. A Zero Depreciation is an add-on cover on two-wheeler insurance that protects your vehicle from the depreciation at the time of filing the claim. If you do not want to pay any extra amount from your own pocket at the time of claim, you should go for this add-on cover.
Zero depreciation bike insurance offers a comprehensive insurance cover to the policyholder without considering the depreciation. On the flip side, zero depreciation bike insurance is costlier than the regular bike insurance.
How to Get Zero Depreciation Cover?
A zero-depreciation cover is not a part of a regular two-wheeler insurance policy. It is an additional benefit or an add-on cover that you are required to purchase from your insurance provider. It is made available to you by your insurer only when you agree to pay an extra premium for availing the zero-depreciation cover. The exact premiums will be calculated on the basis of the model of your bike, its make, age, your address, etc.
This zero-depreciation cover is best for people who have luxury bikes or have expensive spare parts fitted in the bike. Also, people who live in or frequently travel through accident-prone areas must opt for this cover.
The Benefits of Zero Depreciation Bike Insurance
There are numerous benefits of having zero depreciation cover bike insurance. Some of them are mentioned below:
- In the case of a regular insurance plan, customers are disappointed due to the deductions made by the insurer in the claim amount. A major portion of the deducted amount comes from the depreciated bike parts. But if you have zero-depreciation bike insurance, you will have no such deductions, and will be able to get the full claim amount.
- It gives you a more secured and peaceful feeling at the time of mishap that you don’t have to bear the losses from your pocket.
- The regular rate of depreciation in the two-wheeler insurance policies ranges between 0% and 50%, but when you have zero depreciation cover, you can get the full claim.
- It gives an added protection to your bike.
- You will have to spend either nil or minimum expenses out of your own pocket other than labor charges.
- This cover adds value to your basic bike insurance plan.
- Due to the zero-depreciation cover, the depreciation of your bike parts will not be taken into consideration at the time of claim.
Zero Depreciation Cover – Inclusions and Exclusions
Let us look at what’s included and excluded in a zero-depreciation cover:
- You can get the zero-depreciation cover on both your new and renewed bike insurance policies.
- The zero depreciation covers the components like rubber, glass, fiber, nylon, and plastic.
- The zero-depreciation provides cover to the new bikes and bikes of age of up to 2 years.
- You can raise claims twice during the policy term or a single claim per year. This limit on the number of claims depends on your.
- This cover is only valid on select bike models and makes of the bike. To know more, you will have to go through your insurance policy.
- If the damage is caused due to an uninsured hazard, the zero depreciation will not provide coverage.
- Normal wear and tear is also not included in the zero-depreciation cover.
- Mechanical breakdowns are not covered.
- Damage to the items like fuel kit, gas kits, and tyres will not be covered in the zero-depreciation policy, as these are uninsured items.
- The zero-depreciation cover needs to be renewed annually to continue the cover.
- You will not get the benefit of the Zero depreciation cover if your insured bike is totally damaged or someone has stolen it.
- The insured bike must be repaired at a network garage only that has partnership with your insurance provider.
These inclusions and exclusions vary with the insurer. You may know more about it by going through the fine print of your insurance policy. You can also login to the website of your insurance provider to know the zero depreciation terms and conditions for your bike insurance purchased online.