Have you ever heard of zero depreciation cover? It’s an insurance policy that a lot of two-wheeler owners opt for. But what is it, and how does it work? Find out in this article as we discuss the benefits of zero depreciation cover and how it can be beneficial to you as a two-wheeler owner.
Introduction to Zero Depreciation Cover
A zero depreciation cover is an add-on benefit available with comprehensive two-wheeler insurance policies. It covers the entire value of your bike in case of an accident, without any deduction for depreciation. In other words, you get a full payout for repairs or replacement, no matter how old your bike is.
This cover is especially useful if you own a high-end bike or a sports bike, which tend to have high repair costs. It’s also a good option if you’re likely to make multiple claims on your insurance policy, as it will help keep your premiums down.
However, it’s important to remember that a zero depreciation cover does not cover wear and tear or mechanical damage. It’s also not available on all policies – so be sure to check with your insurer before buying.
What Are The Benefits of Zero Depreciation Cover?
Depreciation is a natural process where the value of an item reduces over time. When you purchase a new car, for example, it will be worth more than it is after a few years of use. The same can be said for your two-wheeler.
Zero depreciation cover ensures that you are reimbursed the full value of your two-wheeler in case of an accident, regardless of its age or depreciation. This benefit is particularly useful if you have a relatively new two-wheeler since it will be replaced with a brand new one in case of an accident.
In addition to protecting your two-wheeler from financial loss due to depreciation, zero depreciation cover also offers other benefits such as:
- Full Coverage: A zero depreciation policy covers the cost of repair or replacement of parts without factoring in depreciation. This means that you are fully covered in case of an accident, regardless of the age or condition of your two-wheeler.
- No Claim Bonus: If you have a zero depreciation policy and do not file any claims during the policy period, you will be eligible for a no claim bonus (NCB). This discount can be used to reduce the premium on your next policy renewal.
- Peace of Mind: Knowing that your two-wheeler is fully covered in case of an accident can give you peace of mind and help you enjoy your rides worry-free.
How Does The Zero Depreciation Cover Work?
When you purchase a two-wheeler insurance policy with zero depreciation cover, you are essentially opting for complete coverage for your vehicle. This means that in the event of an accident, your insurer will reimburse you for the entire value of your bike, without deducting for depreciation.
In order to qualify for this benefit, you will need to have paid the mandatory excess on your policy. The excess is the amount that you are required to pay towards any claim that you make. It is important to remember that even with zero depreciation cover, you will still be required to pay the excess in order to make a claim.
One of the major benefits of opting for zero depreciation cover is that it protects your bike from financial losses in the event of an accident. Depreciation is a major factor that is considered when calculating insurance payouts, and by opting for this cover, you can be sure that you will receive the full value of your bike in the event of a claim.
Another benefit of this cover is that it can help to reduce your overall premium costs. This is because insurers view customers with this type of cover as being less risky than those who do not have it. As such, they are often willing to offer lower premiums to customers who opt for zero depreciation cover.
What Are The Exclusions of the Zero Depreciation Cover?
There are a few exclusions of the zero depreciation cover for two-wheeler insurance. These include:
- Damage to tyres and tubes: Tyre and tube damage is not covered under zero depreciation cover. You will have to pay for any repairs or replacements yourself.
- Engine and gearbox damage: Engine and gearbox damage is also not covered under zero depreciation cover. You will have to pay for any repairs or replacements yourself.
- Depreciation on parts: Some parts of your two-wheeler may depreciate in value over time. This depreciation is not covered under zero depreciation cover and you will have to pay for it yourself.
- Accidental damages: Accidental damages are not covered under zero depreciation cover. You will have to pay for any repairs or replacements yourself.
How Much Does the Zero Depreciation Cover Cost?
The cost of a zero depreciation cover for a two-wheeler insurance policy depends on the make and model of your bike, as well as the Insured Declared Value (IDV) of your bike. The IDV is the market value of your bike at the time of purchase, and is used to calculate the premium for your insurance policy.
For example, let’s say you purchase a new bike with an IDV of Rs. 1 lakh. If you choose to add a zero depreciation cover to your policy, you can expect to pay an additional premium of Rs. 2,500-3,000. This means that your total premium would be around Rs. 12,500-13,000 per year.
While the cost of a zero depreciation cover may seem like an unnecessary expense, it could save you a lot of money in the long run if you ever need to make a claim on your insurance policy.
Pros and Cons of Zero Depreciation Cover
Zero depreciation cover is one of the add-on covers available with two-wheeler insurance. It is also called as nil dep or full value insurance. A standard two-wheeler insurance policy does not cover the entire value of your bike in case of an accident. The insurer will only pay for the current market value or the ‘insurance declared value’ (IDV) of your vehicle, which is much lower than the original cost. In order to get the full value of your vehicle in case of an accident, you need to purchase zero depreciation cover.
Pros:
- You will get the full value of your vehicle in case of an accident.
- It covers all parts of your vehicle, including expensive ones like engine and gearbox.
- It is useful if you have a new vehicle as it will cover any damages incurred during the first year when the IDV is usually high.
Cons:
- It is a costly add-on and may not be affordable for everyone.
- It has a limited coverage period and needs to be renewed every year.
- It does not cover wear and tear or depreciation caused by normal usage over time.
Conclusion
We hope this article has helped you to understand the benefits of a zero depreciation cover for two-wheeler insurance. A zero depreciation cover can help make sure that your repair costs are not too high in case of an accident, and it will also ensure that you get the best value for money when it comes to repairing or replacing parts of your bike. If you haven’t already got one, we suggest looking into getting a zero depreciation policy for your two-wheeler insurance today!