Importance of Having Zero Depreciation In Bike Insurance

Bikes are the treasured possessions of every owner. Taking care of the bike involves burdening expenses. Investing in bike insurance will take these burdens off your shoulders. Although third party insurance is mandatory according to the Motor Vehicle Act, it is more important to have a bike insurance policy that offers maximum coverage. Insurance companies offer additional facilities in the form of insurance covers in order to provide you the required coverage. One of the most important covers is the zero depreciation cover. 

What Is Zero Depreciation Cover? 

Depreciation is a phenomenon that every machine undergoes. This is mainly because, over time the efficiency of your bike will decrease owing to the regular wear and tear. This will reduce the market value of your bike. The Insured Declared Value (IDV) of your bike is determined by subtracting the depreciation from the selling price of the bike. Insurance companies use the IDV of the bike for determining the settlement amount as well as the premium for your bike insurance. 

In case you file a claim for your bike for damage beyond repair, the settlement amount you receive will depend on the IDV of your bike which is going to be lesser than the price you purchased it for. 

Having a zero depreciation cover for your bike will eliminate the depreciation cost. Which means that the insurance company will settle the claim with the amount equal to the price that you purchased the car for. Most insurance companies limit the number of times that you can claim your bike insurance with this cover. 

What Are The Benefits of Zero Depreciation Cover? 

The following are the advantages of having a zero depreciation cover for your bike insurance policy- 

1. In case you met with an accident that has resulted in extensive damage to your bike, you can claim insurance under this cover. The insurance company will pay you the complete settlement amount that is equal to the price at which you purchased the car. 
2. The zero depreciation cover can be applicable to both new bikes and can be purchased at the time of bike insurance renewal. 
3. The insurance cover offers coverage on all rubber, fiberglass, nylon and plastic auto parts of the bike. 
4. If you purchase a new bike, this insurance cover is designed to keep you financially safe. The zero depreciation cover is meant for bikes that are younger than 2 years and can be claimed twice in most insurance companies. The limit on the number of claims varies from company to company. 
5. The standard depreciation rate in bike insurance policies are usually between 0% to 40%. With a zero depreciation plan, the policyholder can claim the full amount. 
6. Very suitable for owners of luxurious bikes or bikes with expensive spare parts and accessories. 

Exclusions Under The Zero Depreciation Cover 

Like every other policy, the zero depreciation cover also has certain exclusions. The following are the common exclusions- 

1. Most companies offer the zero depreciation cost only for certain makes and models. Thus, it is advised to read the policy carefully before going ahead with it. 
2. Any damage that is caused due to an uninsured peril or normal wear and tear will not be settled under this insurance cover. 
3. Damages caused by mechanical breakdowns especially to uninsured items will be excluded from the insurance cover. 
4. This cover requires annual renewal to keep it valid. 

Take Away 

The zero depreciation cover is one of the most important insurance covers for your bike especially if you have purchased it recently. Adding these additional covers to your bike insurance policy will increase the cost of your premium. Thus, make sure to choose the appropriate insurance policy covers and ride safe. 

Also read

Benefits of Zero Depreciation Cover For Bike

Difference Between Comprehensive and Zero Depreciation Bike Insurance Policy

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.