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.
Listed below are some of the key features and benefits of a nil depreciation cover in two-wheeler insurance:
A vehicle owner can use the benefit of the nil depreciation factor under the below-listed circumstances:
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.
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