You have recently invested in a sports bike and are excited to take your first ride on the open road. The feeling of freedom, speed, and adventure is unbeatable. But then, you start wondering—what if you get into a minor accident or face some unexpected damage? It is heartbreaking, not just because of the damage to your new bike but also because of the potential repair costs. That is where the importance of choosing the right bike insurance comes in, particularly with the zero depreciation cover.
What is the Depreciation of Two-wheelers?
Depreciation is the percentage decrease in the worth of your two-wheeler because of regular wear and tear of the bike and its components. Suppose you purchased your bike for ₹1,40,000 and wish to resell it after three years. If the bike depreciates by 25% during this period, the maximum you can get from reselling is ₹1,05,000.
What is Depreciation in Bike Insurance?
Depreciation comes into play when your bike sustains damage and requires repairs or replacement, and you wish to raise an insurance claim for it. At the time of claim settlement, the bike insurer deducts the depreciation amount and deposits the balance into the policyholder’s or garage owner’s account, depending on the type of claim.
The regulator, IRDA, predetermines the rate of depreciation for two-wheelers. Here are the rates:
| Age of the Two-wheeler | Depreciation Percentage |
| Up to 6 months | NA |
| Between 6 months and 1 year | 5% |
| Between 1 year and 2 years | 10% |
| Between 2 and 3 years | 15% |
| Between 3 and 4 years | 25% |
| Between 4 years and 5 years | 35% |
| Between 5 and 10 years | 40% |
Depreciation rate of bike components set by the IRDA:
| Two-wheeler Components | Applicable Depreciation |
| Nylon/ batteries/ tyres/ rubber/ tubes/plastic parts | 50% |
| Fibre-glass materials | 30% |
| All other components made of glass | Nil |
What is Zero Depreciation Cover?
Zero depreciation policy is an add-on that you can purchase by paying an extra premium to complement your comprehensive or standalone own damage cover. With this cover, when you file a claim for bike damage or repairs, the insurer compensates you with the full invoice amount and not for the insured declared value (IDV) in bike insurance. They only deduct the amounts associated with the voluntary and compulsory deductibles.
However, there are certain scenarios in which the zero depreciation cover will not help. Here are some:
- With various insurers, you can buy this cover only for bikes under two years old.
- You can benefit from this cover for a maximum of two claims in a policy year.
- Your claim is valid only if the damage falls under the perils mentioned in the own damage cover of the policy.
- The cost of repairing or replacing worn-out parts due to regular use is not included.
- You won’t receive the zero depreciation benefit if your bike is stolen or declared a total loss. For complete coverage against such incidents, you will need Return to Invoice (RTI) cover.
How to File Claim for a Two-wheeler Damage with a Zero Depreciation Add-on?
You can raise a claim under zero depreciation cover by following these steps:
- Step 1: Immediately notify your insurance company about the accident or damage. You can do this via their helpline, app or website.
- Step 2: Submit a copy of the FIR (if required), your policy details, RC and Aadhar card. Ensure all documents are clear and legible.
- Step 3: An assessor will inspect your vehicle to assess the damage. Make sure the vehicle is in the same condition as when the damage occurred.
- Step 4: Once the assessment is done, the insurer will calculate the final amount to be credited without accounting for depreciation but deducting the deductible amount.
- Step 5: If your claim is approved, the insurer will directly settle the repair cost with the garage.
When Should You Opt for Zero Depreciation Cover?
You may consider opting for a zero depreciation cover in the following scenarios:
- If you own an expensive bike, zero depreciation cover becomes essential, as the repair and damage costs can be much higher than those of a traditional commuter bike.
- If you live in an accident-prone area or a city where natural calamities are common, opting for this cover makes sense because your bike is highly likely to sustain damage.
- If you often drive long distances, your bike may wear and tear more. In such cases, zero depreciation cover protects you from the high costs of parts replacement by ensuring you receive the full value for any damaged components.
Conclusion
Opting for a zero depreciation cover when buying bike insurance online is one of the smartest decisions you can make. It ensures your bike’s protection, especially during the crucial first few years of ownership. This add-on provides full-value compensation for repairs and replacements without depreciation deductions, ensuring you don’t spend a significant amount of your money. So, the next time you renew your bike insurance, consider the advantages of zero depreciation cover.
Follow our WhatsApp channel
