Machines are prone to depreciating in value over time. This can either be due to its use or simply due to the passage of time. Whatever the reason, its value does get impacted as time passes. Two-wheelers are no exception to this phenomenon. Since the engine is the heart of the vehicle, which has several moving parts, there is a reduction in its value over time, which is called depreciation.
How does depreciation impact the bike insurance policy?
As discussed above, the depreciation element lowers the value of the vehicle. This is not only true at the time of its sale, but also when raising an insurance claim. As the value of the vehicle reduces with the passage of time, the replacement of its parts will require a lower amount, which is reflected by way of a reduced insurance payout. Thus, the older the bike, the higher the depreciation impacting it. This, in effect, lowers the compensation paid by the insurance company. The depreciation component is calculated on different spares at different rates since they have left the factory floor. Using a zero-depreciation insurance cover, the impact of depreciation on lowering the insurance claim payout can be mitigated. Let’s look at it. * Standard T&C Apply
What is a zero-depreciation cover?
Zero-depreciation cover, also known as nil depreciation cover, bumper-to-bumper insurance cover, and zero-dep plan, is an add-on to your standard comprehensive insurance plan. With the help of this add-on, any effect of depreciation impacting the compensation at the time of claim can be eliminated. Thus, in effect, the claim amount increases. However, you must keep in mind that it is an additional insurance cover that you can opt for and that it does impact the bike insurance price.
What are the advantages of choosing a zero-depreciation plan?
Zero depreciation add-on is an effective way to eliminate any effect of depreciation in your bike insurance claim that otherwise would lower the compensation paid by a standard comprehensive cover. Hence, the benefits of a zero-depreciations cover are far greater than its cost.
The high out-of-pocket expenses that are required to be paid for standard comprehensive plans are reduced when you purchase a zero-depreciation cover. Not only for comprehensive plans, but also for standalone own-damage covers, the zero-depreciation add-on works in a similar fashion.
In addition to the above, a zero-depreciation add-on includes replacement coverage for a wide number of spares. Thus, the investment cost of these plans is minimal when compared with the benefits they offer.
However, despite the above benefits, you must keep in mind that such coverage is limited to vehicles no older than five years. So, if you have an old bike, you will not be able to take advantage of this add-on cover. * Standard T&C Apply
Who can benefit from buying a zero-depreciation add-on?
A zero-depreciation cover is best suited for two-wheelers that are new or relatively new in the case of a used two-wheeler. Individuals with expensive bikes whose repair costs are high can benefit from using a zero-depreciation plan. At these times, when depreciation lowers the insurance payout, it can burn a deeper hole in your wallet by way of increased out-of-pocket expenses. Also, new and inexperienced riders can make the most of this zero-depreciation plan as they have a higher probability of damaging their vehicle. * Standard T&C Apply
These are some reasons why it is essential to have a zero-depreciation cover as a complementary feature to your comprehensive insurance cover. While it does impact the price, you can make use of a two wheeler insurance premium calculator to gauge how much it impacts the overall premium amount. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.