You insure your vehicle hoping to get the much-needed financial assistance. But it is really disappointing to know that the insurer will cover only a part of the total expenses.
Yes, you’ve heard it right. The insurance companies don’t compensate the entire claim amount. Let’s understand with an example:
Imagine, you have own HDFC bike insurance. While claiming the insurance, you finally came to know that out of your total amount only 70% is settled. When discussed with the agent, you came to know that they insurer deducts the deductibles to be paid and finalized an IDV after subtracting the depreciation of the vehicle.
Every insured has to pay the predefined deductibles. Deductibles are of two types, compulsory and voluntary. Compulsory deductible is predefined, which is deductibles from the total claim. On the other hand, at the time of buying a plan, the insured agrees upon paying the voluntary deductible. When compulsory deductible has no bearings on insurance premium, one can reduce the premium by opting for higher voluntary deductible.
Another important factor that plays an important part at the time of claim is depreciation.
How Depreciation Impacts?
Depreciation is nothing but the reduced value of your bike with regular wear and tear and when it ages. It is the proportional t o the Insured Declared Value of the bike and it directly influenced the premium. Here comes, the Bumper-to-Bumper insurance into the picture that protects the insured against such depreciation.
What is bumper-to-Bumper Policy
Bumper-to-Bumper insurance also known as Zero Depreciation or Nil Depreciation cover is a type of insurance policy that aids the insured with full availing the full value of the vehicle at the time of insurance claim. As you already know, two wheeler insurance companies don’t compensate the entire claim amount, the insured gets the remaining amount after reducing the deductibles and depreciation. However, it is well assured with a Bumper-to-Bumper policy that no depreciation will be subtracted and the insurer will bear the entire cost of repair or replacement of vehicle body parts. This policy offers 100% coverage for rubber, fibre or metal parts. However, engine damage due to leakage of oil or consumables and mechanical breakdown etc. are not covered. Well, we’re coming to this point.
Who Should Buy Bumper-to-Bumper Policy
This policy is tailor-made for:
- Those who buy brand-new vehicle
- People with high-priced luxury bikes
- New or inexperienced drivers
- Those who are living in accidental prone areas
- High-end bikes with expensive spare parts
Zero Depreciation Policy: Some Facts
Pay attention to some of the facts of Zero Depreciation cover that one shouldn’t miss:
- No doubt, the policy comes with a cost. The premium rates are comparatively higher than the other plans. However, the cost comes with the assurance of a peaceful state of mind.
- This policy is especially for luxury bikes that demand high-end maintenance. Even one can’t avail this policy for a vehicle more than five years. Even some insures have set a certain parameters for number of killometrs driven to avail the cover. That is why it is not recommended by the insurance experts to pay a huge premium for availing this policy if you own an old bike.
- The policy also comes with a limitation on maximum number of claims that you can make during a policy year. However, it may vary from insurer to insurer. That is why it is essential to check the policy final print at the time of zero down a policy.
- The insurer will deny your claim for damage to two-wheeler engine due to water ingression or leakage of oil, normal wear and tear to tyres, clutch etc. In insurance terms, mechanical breakdown and consumables are not covered, except it is an accidental case.
- Every claim is subject to a considerable deductible, whether it is a basic policy or Bumper-to-Bumper policy. The insured is liable to pay this as per the deal fixed at the time of buying a policy.
When a Claim is Considered Null & Void
The chances of your claim getting rejected are higher under the following situations:
- If a private vehicle is used in commercial purpose and damaged
- If the driver was found not using a valid driving license while driving and accident happened
- If the accident is occurred due to the consumption of alcohol or other related substances
- In case the driver was involved in any kind of illegal or malicious driving, the claim will be rejected
- In case the claim is not registered within the stipulated window of time
Why is it so Famous?
Nil depreciation cover has a great demand, especially among the two-wheeler owners. Insurance seekers wish to buy this cover along with the base policy. This is beneficial for bike owners with high-end features. With a zero depreciation cover, one can be compensated even for the depreciated parts of the vehicle as well. Usually, at the time of settling a claim, the insurer calculates the depreciation and estimate the IDV of the vehicle. Based on this, the claim is settled where the insured doesn’t get the full amount. However, with a Zero-depreciation, the complete value of the value is assured. It is popular because the normal insurance cover doesn’t offer to full value.
The Bottom Line!
Your prized possession is susceptible to damages due to unforeseen events, even while at rest. When you can’t predict such situations, getting insured the vehicle with optimum motorbike insurance coverage is what necessary. Boost the much-needed protection to your valued possion with a Bumper-to-Bumper Policy. No doubt, you will be paying an extra premium but it may be worth it.