Nil Depreciation Cover In Two Wheeler Insurance

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Having a two-wheeler insurance policy is absolutely imperative in this day and age. A two-wheeler insurance policy protects the finances of a vehicle owner, covering damages to the vehicle and medical expenses following an accident. In addition, a comprehensive two-wheeler insurance policy additionally covers the damages to the vehicle caused by natural calamities such as floods, earthquakes, lightning, etc., riots, strikes or terrorist activity.

When the insured vehicle owner makes a claim to cover the damages caused to the vehicle, the insurance company takes into consideration the depreciation factor or the insured declared value of the vehicle. Ranging between 0 and 40%, the depreciation factor is based on the age of the vehicle, the area where the bike is ridden, and the model of the vehicle. Once the claim is made by the policyholder, the insurance company will disburse the coverage for the damages up to the insured declared value (IDV) of the vehicle.

If the damage is more than the insured declared value (IDV), the policyholder will have to meet the outstanding expenses. In order to prevent this inconvenience, insurance companies have the add-on zero-depreciation or nil depreciation cover. The nil depreciation cover negates the depreciation factor, giving the policyholder the privilege of receiving the maximum claim amount. Let’s discuss the various aspects of a nil depreciation cover in two-wheeler insurance.

Features And Benefits Of A Nil Depreciation Cover

Listed below are some of the key features and benefits of a nil depreciation cover in two-wheeler insurance:

• With a nil depreciation add-on cover, the vehicle owner can avail the maximum possible coverage for damages following a vehicle, irrespective of the age and model of the vehicle.
• Coverage for damaged rubber, nylon, plastic, fiberglass, and plastic parts.
• All vehicles more than 2 years old are eligible for the nil depreciation cover.
• Reduces the amount one will have to spend from his/her own pocket to cover the damages.
• The nil depreciation factor is an additional cover, meaning that it will have to be purchased over and above the premium of the insurance policy.
• Nil depreciation cover kicks in in the case of ‘own damage’ and not consequential damage.

When Can A Vehicle Owner Avail The Nil Depreciation Cover?

A vehicle owner can use the benefit of the nil depreciation factor under the below-listed circumstances:

• The nil depreciation add-on cover is applicable if the two-wheeler is repaired at an authorised service center or a listed garage of the insurance company.
• The nil depreciation factor can be used only for a maximum of two claims during the term of the insurance policy.
• This add-on cover is not applicable in cases of total damage, consequential damage, or in cases where the bike is stolen.
• The nil depreciation add-on cover covers the cost of damages due to normal wear and tear of the two-wheeler.
• If damage is caused due to reasons as stated in the exclusion list of the insurance policy one cannot use the nil depreciation cover.
• Coverage for damaged tyres or replacement is not applicable in the case of the nil depreciation cover.

Opting for a nil depreciation factor will reap you the benefits in case your vehicle is damaged following an accident as it overlooks the depreciation factor and allows the vehicle owner to make a claim for the maximum coverage of the insurance policy. Though it is an added expense over the premium of the two-wheeler insurance policy, it comes of great help if your vehicle is old.