What is zero depreciation cover for two-wheeler Insurance?

03 June 2019

Two-wheelers, like all other consumables, are prone to wear and tear and depreciate in utility over some time. While this is inevitable, a Zero depreciation cover can come in handy, with reassuring feeling without losing sleep over factoring in of deprecation. Zero Depreciation cover guarantees you comprehensive coverage, undermining the effects of depreciation. For instance, let’s say that your two-wheeler has had a mishap and is damaged. In such cases, a conventional policy does not salvage you, since all the costs and expenses towards the depreciation in the form of repair/replacement expenses of plastic, fibre, rubber and glass parts, would have to be borne only by you, since the terms of the policy would not provide cover for these items. However, what if the entire cost of the damage suffered by the vehicle in the mishap was to be paid by the insurer? It’s this magic add-on, viz., Zero Depreciation Cover, which ensures that you wouldn’t be spending anything towards the expenses of repaired/replaced parts.

For clarity, let’s assume that a two-wheeler, costing Rs. 1,25,000/- has had an accident and is being worked on for necessary repair, face-lift, replacement, maintenance, etc. If the vehicle has only a conventional accident policy cover, as stated above, without the add on of Zero Depreciation Cover, at best, you may get about 70% of the expenses incurred, since the insurance company would deduct 30% towards depreciation and would reimburse only the remaining amount as the cover cost for expenses. However, if the Zero-Depreciation Cover, as add-on was also taken with it and was valid at the time of the mishap, an entire claim for your loss would be reimbursed without taking into account the depreciating value of the two-wheeler.

However, it is always prudent to bear in mind that there are certain inclusions and exclusions even with a zero-depreciation cover. They are:

Inclusions:

• Fast depreciating parts such as rubber, nylon, plastic and fibreglass parts, are not covered in a conventional policy. The zero-depreciation cover covers the cost of repair/replacement in claim settlements.
• The add-on cover will be valid for up to 2 claims during the policy term.
• The zero depreciation cover is specifically earmarked for bike/two-wheeler which is not older than two years.
• Zero-depreciation covers on purchases of new two-wheeler vehicles and also on renewal of policies.

It’s wise to go through the terms of the policy since specific designated two-wheeler models alone are covered under Zero Depreciation Policy add-ons.

Exclusions:

• Damages on account of Mechanical problems.
• Damages on account of normal wear and tear on account of aging.
• Compensation on the damage of uninsured items such as bi-fuel kit, tires and gas kits.
• If the vehicle is completely damaged/lost, this add-on does not come to rescue.

Conclusion

A conventional and standard two-wheeler insurance policy would become more powerful with the add-on of zero deprecation cover and ensures easy claim process and without hurting your purse

Liberty General Insurance offers comprehensive two-wheeler insurance policies. To avail one, click here.