Every machine has a depreciation value, owning a land or any other immovable property that is considered as an asset is not depreciable. Depreciation by definition means decrease in value due to its age and use. Any bike owner cannot avoid the usual and minor scratches, dents, etc. on a daily basis. Today with rise in inflation, buying a two wheeler has also become a costly affair. And if it’s been in a mishap then the repair costs, third party injuries, etc. all these things can create a huge hole in your pocket. In such cases, an insurance can be your saviour.
Now, while buying a two-wheeler insurance, the company offers you few add-on covers. One of the cover is ‘Zero-Depreciation’. Many of us are not aware of the benefits and the meaning of this cover. We have a tendency to say ‘no’ to add-on covers as we think it is simply an added expense to increase our bill amount. But it is not true. The add-on covers are offered for its various benefits and you will be surprised to know the advantages of the same. Read on:
A ‘‘Zero-Depreciation’’ cover gives you a full coverage for the vehicle as whole or part of the vehicle, without deductions of depreciation. The standard rate for two wheeler insurance policy is up to 40%, but with an add-on option of ‘Zero-Depreciation’ cover, you can claim for full amount. This is a huge advantage, because while calculating for compensation or repairs on accidents or otherwise, all insurers take depreciation value into consideration. That is the reason why standard plan gives you a claim amount after deducting the depreciation value.
|Comprehensive two wheeler insurance policy||Zero-depreciation add-on policy|
|The premium for comprehensive policy primarily depends on the cubic capacity and the rates are decided by the IRDAI.||This is an add-on benefit cover that a bike owner can purchase along with comprehensive cover. The premium for this benefit is slightly higher.|
|If the bike is covered only with the comprehensive cover, then the claim amount will be paid to you after calculating the rate of depreciation.||If the bike is covered with this add-on cover, then the claim amount will be paid fully as the rate of depreciation is not considered.|
|For the depreciable motor parts, the cost of coverage is only partial.||Even the depreciable motor parts are also fully covered.|
|The comprehensive cover can be availed for any vehicle which is not older than 15 years.||The zero-depreciation cover on the other hand can be availed only for new vehicles not aged above 3 years.|
If you have availed the zero-depreciation cover, then for certain parts of your bike, the following rate of depreciation is applicable:
|Rate of Depreciation||Two-wheeler components|
|Nil||Few components made of glass that is listed in the policy.|
|30%.||Fiber and glass materials.|
|50%.||Nylon, tyres, rubber, tubes, plastic parts and batteries.|
When you purchase the policy, please read the terms and conditions clause carefully. The claim period and premium amount and few of the factors which are not standard according to the government, may vary from company to company. For each type of claim there will be certain conditions on how to avail the claim. And most importantly know what is not covered in this add-on purchase, because it is not standard with every company. Generally following are the instances when you can and cannot avail:
For damages caused due to public protests like fire or destruction of the bike, few insurers offer to cover a part of the expense in some cases. If you have further doubts, enquire with your insurance provider so there will be no confusion in the future.
Some of the major insurance providers like Bharti AXA General, ICICI Lombard, Tata IG, Reliance and HDFC Ergo have been offering the ‘Zero-Depreciation’ cover since past two years. And majority of them allow two claims per policy period along with no-claim bonus benefit. IDRA has allowed this benefit in the market since past two years, and it’s time we make use of it. With the road conditions here, the potholes, traffic etc. make it miserable to enjoy the ride on new bike and it’s hard to save from some unforeseen damages. So the wiser thing to do is to get this add-on cover so you can ride tension free and also its pocket friendly. Contact your insurance provider today or shop online for best deals.