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Depreciation is one of the factors that determine your vehicle’s Insured Declared Value at the time of your insurance policy purchase or renewal. Depreciation is the loss in the value f the car or the car parts with respect to the car’s age. Depreciation is generally of two kinds, depreciation on car parts and depreciation on the car.
Now Bumper to Bumper cover which is also known as ‘Zero Depreciation cover’ or ‘Nil Depreciation cover’ is an add-on cover which when added to your base policy or comprehensive insurance policy offers you the complete coverage which includes protecting the value of your vehicle’s parts and accessories.
Coverage for regular wear and tear of a vehicle is not included in a comprehensive car insurance policy. Hence, in the case of any mishap, if you haven’t opted for Bumper to Bumper cover, you will have to pay for the repair or replacement of the car parts or accessories yourself. But in case you do avail a Bumper to Bumper cover, the insurer will cover the cost for the replacement or repair of the depreciated car parts and accessories post a mishap, which is a boon to the insured as the cover allows the policyholder to receive the complete insured amount without any deductions due to depreciation on the car parts.
The government of India have fixed rates of depreciation on car parts and accessories that need to be adhered by all the insurers. The rates of depreciation are as follows:
The depreciation rates for all the other car parts, (including those made of wood) are as given below:
|Vehicle’s Age||Rate of Depreciation|
|Until 6 months||0%|
|More than 6 months but less than 1 year||5%|
|1 year to 2 years||10%|
|2 years to 3 years||15%|
|3 years to 4 years||25%|
|4 years to 5 years||35%|
|5 years to 10 years||40%|
|Above 10 years||50%|
Bumper to Bumper cover is beneficial to the following:
The following factors determine the insurance premium for Bumper to Bumper cover:
Bumper to Bumper cover is one of the most sought out and popular add-on covers preferred by car owners in india for the following reasons:
Bumper to Bumper Cover comes with certain limitations, such as:
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