The insurance industry has grown significantly, offering a variety of products and plans to cater to different needs. Today, buying bike insurance is more accessible than ever, with options like comprehensive coverage and zero-depreciation add-ons readily available.
However, many people are unsure about the differences between these two options. It’s important to understand their unique features so you can choose the best policy for your situation. Below is a detailed breakdown of what comprehensive and zero-depreciation bike insurance cover, as well as their key differences.
Read more: What to Know About Zero Depreciation Cover Under Bike Insurance?
What is a Comprehensive Bike Insurance Plan?
A comprehensive bike insurance policy offers broad coverage, protecting both your bike and any third-party liabilities. This type of insurance covers damages caused by accidents, natural disasters (like floods or earthquakes), theft, and man-made events such as riots or strikes.
In addition, many insurers offer various add-ons that can enhance the basic coverage provided by comprehensive bike insurance.
Coverage Under Comprehensive Bike Insurance
Comprehensive bike insurance typically covers:
- Third-party liabilities
- Accidental damage
- Natural disasters (e.g., floods, storms, earthquakes)
- Theft
- Total loss or severe damage
- Man-made events (e.g., riots, vandalism)
- Optional add-ons for further protection
What is Zero Depreciation Bike Insurance?
As a bike ages, its value depreciates due to normal wear and tear. When you file a claim under a standard comprehensive plan, the insurance provider reduces the payout by factoring in depreciation. This means you may not receive the full cost of repairs or replacements.
Zero-depreciation bike insurance, usually offered as an add-on to a comprehensive plan, eliminates this reduction. With this add-on, the insurance company reimburses you for the full cost of repairs, without subtracting depreciation for parts like plastic or rubber components.
What is Covered Under Zero Depreciation Add-on?
A zero-depreciation add-on generally covers:
- Full cost of repair parts such as plastic, fiber, and rubber components
- Repairs or replacement without factoring in depreciation for most parts
- Exclusions: Tyres, tubes, and certain types of wear and tear, as well as mechanical or electrical failures, are not typically covered.
When you use your bike, it depreciates over the years due to normal wear and tear. This depreciation or devaluation is inevitable, and many insurance companies provide safeguards against it.
In other words, you can have an add-on to your comprehensive insurance plan in the form of a zero depreciation plan. When you encounter an accident or damage to your bike, the insurance provider will pay for the bike’s depreciation and the damages.
On the contrary, insurance companies pay after considering and reducing the depreciation amount if you only have the general comprehensive insurance plan. Simply put, you get fewer benefits under a comprehensive plan than those in the zero depreciation plan.
Read more: Compare insurances: The best tips
Key Differences Between Comprehensive & Zero Depreciation Bike Insurance
There are many differences between comprehensive and zero-depreciation bike insurance. These differences are highlighted hereunder:
| Basis | Comprehensive Bike Insurance Plan | Zero Depreciation Insurance Plan |
| Insurance Premium | Rates of premiums are lower than that compared to a zero depreciation insurance policy | Premium is higher in zero depreciation insurance plans as they cover the depreciation of the bike as well |
| Depreciation | Depreciation is considered when paying for benefits | Insurance providers do not consider the depreciation under this plan |
| Benefit Amount | The claim amount is comparatively lower since depreciation is considered | The settlement sum is higher since depreciation is not considered |
| Age of the Vehicle | The depreciation amount will gradually increase with the age of the vehicle | The depreciation of the bike is not considered in this plan |
| Coverage of Repair Expenses | The plan does not cover the entire amount of the repair bill as it considers depreciation while providing insurance benefits | It covers the entire repair bill amount, and the policyholder need not pay for any expenses |
Which One Should You Choose?
The decision between comprehensive and zero-depreciation insurance depends on several factors, including the age of your bike and your personal preferences.
- Comprehensive Insurance: If you live in a low-risk area or own an older bike with little market value, a standard comprehensive policy might be sufficient. The lower premiums make it an attractive choice if you’re looking to manage costs.
- Zero Depreciation Insurance: For newer bikes, zero-depreciation insurance provides more robust coverage by eliminating depreciation from the claim process. This ensures that repair costs are fully covered, making it ideal for those who want maximum protection for their two-wheeler.
In conclusion, consider the age of your bike, the risks you face, and your budget when choosing between comprehensive and zero-depreciation bike insurance. Both offer valuable protection, but one may better suit your individual needs.