When you set out to buy a comprehensive bike insurance policy, you may come across the term ‘zero depreciation add-on’ a number of times. This is only because it’s one of the most beneficial add-ons that any comprehensive insurance policyholder can avail of. Understanding the depreciation your bike accumulates over time and the protection you can use against this is very crucial if you wish to make the most out of your two wheeler insurance.
Diving straight to the point,
What is a zero depreciation add-on?
Every vehicle depreciates in market value with the wear and tear it faces while it is being used and this why you would find a second-hand bike priced cheaper than the new one. However useful in buying a used bike, depreciation brings down the total insured declared value that an insurance company covers you for and the depreciation charges would have to be borne by you when getting your bike repaired after an accident.
Nonetheless, to save you from such a financial burden, many insurance companies offer you a zero depreciation add-on or a depreciation cover, which helps you to transfer these depreciation charges to the insurance company and have them pay it for you. It is important to note that this benefit is not available in the third-party insurance for bike and can only be availed as an add-on in a comprehensive insurance policy.
What are its benefits?
The zero depreciation cover offers the following benefits –
- End-to-End protection – A zero depreciation cover helps you claim the entire amount of your insurance policy and allows you to enjoy complete financial relief when getting your bike repaired after an accident. Even your bike’s spare parts are included in this cover and can prove useful for both, luxury bike owners and riders on a budget.
- More savings – The premium you pay slightly increases when you avail of a zero-depreciation add-on. However, this add-on helps you save a significant amount of money in the long run as it saves you from having your IDV reduced due to your bike’s depreciation. To give you more clarity, your bike’s depreciated market price in the instance of your bike not being more than 5 months old is 5% less as compared to its current market value. This depreciation value increases with the increase in usage and brings your bike’s market value down by a humongous 50% in the 5th year of its operation. By availing of a zero-depreciation cover, you can save yourself from such monetary losses and have the insurer pay the depreciation charges.
Now that you know the benefits, there are 3 other things that one needs to keep in mind when getting the zero depreciation add-on and these are –
- The depreciation cover might only be applicable for vehicle models that are not more than 2 years old. However, this condition may differ from insurer to insurer and you can get to know more about this eligibility criterion from the insurer’s website.
- The number of times you can claim this benefit in an insured year is determined by the insurer and differs from company to company.
- Zero depreciation is not applicable to the damages incurred to your vehicle due to normal wear and tear.
We hope this article clears all your doubts regarding the zero depreciation add-on that can be availed with comprehensive bike insurance and convinces you about its utility. All the best!
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