Though a vehicle is considered to be an asset, but unlike most other assets it depreciates every year. If you use a bike, regular wear and tear of the machinery is unavoidable. Buying a new bike and paying for the repairs for your existing one have both become very expensive. Third party liability bike insurance is mandatory as per our law, but if you take a comprehensive bike insurance policy, you will be protected against most of the expenses that are incurred for repair work.
Apart from the regular coverage in a comprehensive bike insurance policy, insurance companies offer various add on covers which are very useful. One of the most useful add on cover offered is the Zero Depreciation cover.
Understanding the Zero Depreciation Cover
Due to the usage of the bike, there is normal wear & tear and this causes the value of the bike to reduce. The depreciation factor is taken into account by most of the insurance companies while calculating the claim amount. When you take a standard plan and file a claim, the amount paid to you will be calculated after deducting depreciation from the value of the bike. If you take a zero-depreciation cover there will be no depreciation applicable and you will get full coverage.
The zero-depreciation insurance add on, covers bike parts that are made of rubber, plastic, fiberglass, nylon, etc. The cover is available for new bikes and can be also taken at the time of bike insurance renewal. But The cover is given to bikes which are not older than two years, this depends on the insurer. Also, most of the insurance companies allow two claims only under this cover during the policy period.
- The following are not covered under a zero-depreciation cover:
- Any damage caused to any item that was not insured like tires, bi-fuel kit and gas kit
- Any damaged caused due to an event which is not insured
- Any damage that is caused due to breakdown of the machinery
- Regular wear and tear
Following are the main benefits of the zero-depreciation cover:
The amount of expenses at the time of claim reduce or are nearly negligible as no rate of depreciation is used while calculating the claim amount. This makes having a bike insurance policy absolutely stress free as at the time of claim you are sure that the complete cost of repairs will be paid and you do not need to keep some funds aside.
Each cover and add on in a bike insurance policy comes with its own set of conditions and thus, reading the policy wordings carefully and having a complete understanding is essential. Most of the insurance companies offering zero depreciation cover for a bike insurance policy have the following conditions:
- The zero-depreciation cover is not applicable if the bike is completely damaged or is stolen.
- During the policy term, this cover can only be used while registering a claim.
The conditions on the policy vary from one insurance company to the other and some may add clauses like the repair work should only be done at one of the network bike repair shops, etc.
The zero-depreciation bike insurance policy is a great add on offered by insurance companies as this makes claim settlement easier without accounting for depreciation. This cover comes at a higher premium, thus, anyone who can afford it must consider buying the cover with an insurance policy.