Financial safety is what we all seek. Be it your health, home, or your vehicle. We care for things that we love, especially if it is your newly purchased two-wheeler. An insurance policy is your best bet that will safeguard you in times of financial distress.
You may be aware that your vehicle’s value decreases as time passes, and similar is the value of its parts. Does this mean your two wheeler insurance company will deduct depreciation when reimbursing your claim? Well, yes. The insurance company accounts for the depreciation at the time of payout. But fret not! Zero depreciation has you covered.
What is zero depreciation cover?
Depreciation is the decrease in value due to the efflux of time. So as your bike’s age increases the value goes on decreasing. Zero depreciation is an add-on policy feature available for comprehensive motor insurance plans. It ensures that your bike’s value remains intact at the time of making a claim.
Say, for example, your bike was involved in an accident, and there is a 20% reduction in value due to depreciation. Now at the time of claim, your insurance company will deduct 20% from the value of spares and then pay the rest. If you have a zero depreciation cover, you can get the full value of spares when claiming insurance.
What are the benefits of a zero depreciation cover?
When you purchase a zero depreciation add-on, you can enjoy the following benefits like claiming the entire amount of claim after honouring the compulsory deductible of your policy. It also reduces the out-of-pocket expense at the time of the claim.
Moreover, you can enjoy enhanced coverage to your existing policy at a nominal cost. Once you opt for zero depreciation cover, you need not worry about lower claim reimbursements. It is undoubtedly one of the most recommended add-ons for all types of buyers.
The inclusions and exclusions of a zero depreciation plan
Zero depreciation cover includes compensation for plastic, nylon, rubber, and even fiberglass parts. It covers the entire cost of replacement and repairs at the time of claim settlement. Further, partial damage to battery and tires are also included under some zero depreciation covers.
This add-on can be availed at the time of the original purchase or your two wheeler insurance renewal. The number of permissible claims under your policy terms varies amongst different insurance companies.
While there are specific inclusions, there are exclusions too. Any uninsured perils, damages due to mechanical fault, routine aging, a complete loss, or damage are typically excluded under your zero depreciation coverage.
How does a standard comprehensive coverage compare to a policy with zero depreciation cover?
- Claim settlement under both policy types is based on similar factors. However, the amounts differ in each case. A zero depreciation coverage offers a higher compensation when filing a claim.
- The premiums for a zero depreciation plan are higher than the base comprehensive policy. But the benefit from these higher premiums weighs more than its cost.
- Plastic and fibre parts are generally excluded but a zero depreciation plan ensures any replacement or repairs required for these parts is covered under this add-on coverage.
While you select suitable additional coverage options, don’t forget to make use of a two-wheeler insurance premium calculator. This nifty tool not only helps in comparison of various coverage options but also eases the selection process.
To conclude, a zero depreciation add-on is not the only add-on that can significantly increase your policy coverage. There are various add-ons that can enhance the coverage significantly.
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