Team AckoSep 17, 2021
If you have ever shopped for car insurance, you probably must have been surprised by how insurance prices are different. Basic motor insurance does not cover all parts of your vehicle. However, a bumper to bumper insurance will provide complete coverage. So, how is this different from Comprehensive insurance? And, how is it better? Read on to learn about the different aspects of a bumper to bumper car insurance.
Under the Comprehensive car insurance policy, the insurance company will depreciate the cost of the parts being replaced or repaired before settling the claim. However, under the bumper to bumper coverage, the insurer covers every part of your car except for damages to the engine, batteries, tyres, tubes and glass. This is usually offered by the insurer as an “Add-on” to the standard policy. It is also called a “Zero Depreciation Cover” or “Nil Depreciation Cover”. Effectively, this provides almost 100% coverage in case of damages to your car caused by an accident. The insurance company will not depreciate the cost of the parts being replaced. This Add-on cover is an excellent choice, especially for car owners listed below:
New car owners
Luxury car owners
First-time car owners
Inexperienced car owners
Car owners who reside in areas that are vulnerable to vehicle accidents
Car owners who are concerned about small dents or bumps
It is an insurance policy which offers complete or 100% coverage towards damages to the metal, fibre and rubber parts of your car. It is offered as an Add-on cover and is not included in the standard car insurance policy. You will have to pay a slightly higher premium to include it in your vehicle insurance policy. However, this type of coverage ensures the insurance company does not depreciate the cost of parts before settling the claim. Thereby, receiving almost every penny spent on repairing the car. However, you need to be aware that this add-on does not cover certain parts such as tyres, batteries, engine damage and glass.
An accident is indeed never a good thing. The cost to replace car parts or repair dents and bumps is enormous, especially if you have spent your hard-earned money to buy your favourite car. Even if you raise a claim, you may have to spend about 50% of the cost of the entire bill from your pocket. With the inclusion of the bumper to bumper cover in your standard car insurance policy, it comes with several advantages which work in your favour.
For instance: If you have not opted for the bumper to bumper coverage and you raise a claim for a repair bill of Rs. 50,000, you may have to pay nearly 50% (Rs. 25,000) from your pocket. However, with the bumper to bumper or zero depreciation add-on cover, the insurance company will pay the full cost of the parts being replaced as the add-on does not consider depreciation of the car parts.
Here are the main benefits of bumper to bumper car insurance:
Complete or 100% coverage while settling claims.
Gain immunity from depreciation except for certain damages.
Beneficial, especially to first-time and luxury car owners.
Offers peace of mind knowing your car is covered nearly 100% by the insurer.
The zero or nil depreciation are the other names for the “bumper to bumper cover” and is beneficial since it offers 100% coverage in case of damages to your car. However, there are a few disadvantages as well. Below is what is not covered under the bumper to bumper insurance:
Generally, insurers allow only two claims during the policy period and this may vary between insurance companies.
The insurer will decline the claim in case the vehicle has been reported that it has been used for illegal activities or unethical use.
Using a private car for a commercial purpose.
Some engine damages, tyres, batteries, glass, clutch plates or bearings may not be covered.
In case the policy has expired, the claim will be rejected.
In case the claim is not raised within the specified timeline, the insurer will not settle the claim.
Damages due to mechanical breakdowns are not covered.
Damages to accessories are not covered.
In case the driver was drinking and driving, then the insurer will not approve the claim.
You can buy car insurance with bumper to bumper add-on online through the insurer’s website or mobile app. The steps to buy are similar to that of the Comprehensive car insurance policy. If you have standard car insurance, you can choose the add-on while renewing the policy. However, you can also choose the add-on at the time of purchasing the vehicle. Below are the steps to buy bumper to bumper car insurance online:
Step 1: Visit the insurance company’s website such as www.acko.com.
Step 2: Enter your vehicle registration number to renew the policy. You can also use the same steps in case you want to change the insurance provider.
Step 3: You will be prompted to select different types of Add-on covers. Choose the Zero or Nil Depreciation Cover as an add-on.
Step 4: Pay the required premium and get your policy document instantly to your registered email address.
The bumper to bumper car insurance renewal is simple, especially if you are doing it online. It is similar to renewing your standard car insurance policy. Below are the steps to renew bumper to bumper car insurance online:
Step 1: Visit the insurance provider’s website.
Step 2: Sign in with your credentials or if you are changing the insurance company, then enter the registration number of the vehicle.
Step 3: Select the add-on before you pay the premium.
Step 4: Pay the premium and receive your bumper to bumper car insurance policy to your registered email address.
The bumper to bumper car insurance cost or premium is slightly higher compared to the regular car insurance. This is because it covers all parts of your vehicle and does not depreciate the value of the parts being replaced while calculating the claim amount. You enjoy complete coverage and the insurer pays 100% towards the claim raised. That said, the cost is marginal compared to the money that you may have to pay from your pocket under the comprehensive insurance plan in case of repairs.
Whether it is a used car or a new car, an insurance policy which covers all parts of the car is indeed a complete package in case of an unfortunate accident. Insurers offer Zero Depreciation Cover as an add-on, which is essentially a bumper to bumper coverage. Over a period of time, a car’s value declines due to the age of the vehicle. This decline in car value is known as depreciation.
The Zero or Nil Depreciation add-on nullifies the depreciation and pays almost 100% of the claim except in case of damages to batteries, tyres, engine and glass. Whether you own a used luxury car or a lower-priced car, under the standard Comprehensive insurance you and the insurer must bear the cost to repair your car. However, with the bumper to bumper insurance for used cars, you can claim 100% of the repair cost from the insurance company. Thereby, having an advantage over the comprehensive insurance.
The bumper to bumper cover or the zero or nil depreciation cover has its limitations as well. Below are some of the limitations of the add-on cover:
Engine damages due to water ingression or oil leakage.
Wear and tear of bearings, clutch plates, tyres, etc.
Driving without a valid driving licence.
Driving after drinking alcohol or consuming other intoxicating substances.
Using a private vehicle as a commercial vehicle.
While the bumper to bumper insurance covers every inch of your car in case of damages due to an accident, it does not cover some aspects of the claim. Here are the details:
Parts such as rubber, plastic, nylon parts and batteries are not covered. A minimum of 50% depreciation is calculated before the insurance company settles the claim.
Fibreglass parts of cars will be depreciated by 30% and do not enjoy the complete coverage, unlike metal parts.
Wooden parts will receive a 5% depreciation in the first year and 10% in the second year, and so on.
Also, read: Vehicle Scrappage Policy in India
So, what is the difference between the comprehensive and bumper to bumper insurance policy? The below table offers an insight into the comparison between bumper to bumper and comprehensive car insurance:
|Bumper to Bumper Cover||Comprehensive Cover|
|Offers complete (100%) coverage||Offers coverage after considering the depreciation of car parts|
|Slightly higher premium||Standard premium amount|
|It does not cover the vehicle after a certain age||Old vehicles are covered|
Also, read: List of Add-On Covers in Car Insurance
Before you buy standard car insurance or the bumper to bumper cover, you need to consider several factors to make an informed choice. Below are the main factors that you need to consider before you opt for the bumper to bumper insurance:
Limitations of Claims per Year: Some insurance companies limit the number of claims you can raise during the policy period. This is to discourage policyholders from raising small claims for every dent. Ensure you check the terms and conditions of the cap on claims when you choose the bumper to bumper cover.
Cost of the Add-on Cover: The premium is slightly higher for the bumper to bumper car insurance compared to the basic Comprehensive car insurance policy. While this may sound expensive, your finances are well protected in case of damages to your car in case of an unfortunate accident.
Not Available for All Cars: There is a limitation to the age of the vehicle. Insurers do not offer bumper to bumper cover for cars after a certain age. Hence, you need to check the terms and conditions before you choose the add-on cover.
When it comes to protecting your car or your financial liabilities in case of damages to your car, you want an insurance policy which helps you cover the car comprehensively. Here are a few common queries about bumper to bumper insurance:
Can I raise a claim to repair dents and bumps through the bumper to bumper add-on cover?
The add-on cover offers coverage towards the repair of dents and bumps. It also covers parts such as plastic, nylon, rubber, fibreglass and metal parts of the insured car.
Will the insurance company cover the battery of my car under the bumper to bumper cover?
No, it does not cover the cost to replace or repair the battery of your car.
Can I raise a claim to repair damages to my car’s engine?
No. Under the Comprehensive Insurance, the car’s engine is not covered nor is it covered under the Zero Depreciation Add-on cover. However, you can opt for the Engine Protection Add-on cover to cover damages to your car engine.
If I have caused an accident that has led to damages to my vehicle, can I raise a claim under the bumper to bumper cover?
Yes, you can raise a claim to cover the cost of repair or replace the parts of the car which were damaged due to an accident caused by you.
Someone hit my car while it was parked in a parking zone. Will I be able to raise a claim under the Nil-Depreciation Add-on cover?
Yes, you can use the add-on cover to raise a claim for the cost to repair or replace the parts damaged when your car was parked in a parking space.
Is the car’s bumper covered under the car insurance policy?
Yes, your car’s bumper is covered under the Comprehensive car insurance otherwise known as own damage cover.
Is it worth raising a claim for small scratches under the bumper to bumper insurance plan?
The policy with the bumper to bumper cover has limitations to the number of times you can raise a claim during the policy period. Hence, it is advisable to raise a claim only when the damages are substantial and requires a lot of money to repair the vehicle.
What is the process to raise a claim under the bumper to bumper insurance?
Inform your insurance company immediately without any delay and raise the claim with them. Get the vehicle checked by the surveyor for the estimation and get the car repaired at the network garage of the insurer or you can get it reimbursed.
Are regular wear and tear of the tyres and tubes covered under the Zero Depreciation Add-on cover?
No, it does not cover regular wear and tear of the tyres and tubes of the insured car.
Can I raise a claim towards damages to my car’s gearbox under the bumper to bumper cover?
No, it does not cover damages to the gearbox of the insured vehicle.
5-year Bumper-to-Bumper Insurance Not Mandatory for New Vehicles
-13 September 2021
In relief to new vehicle buyers, the Madras High Court said that 5-years of bumper-to-bumper insurance for new vehicles is not compulsory. After considering the arguments of the Association of General Insurance Companies, Association of Insurance Agents and Auto Companies, the court decided to make changes to its order of 4 August 2021 and remove the ruling of mandatory for new cars and bikes to be insured with the 5-year bumper-to-bumper insurance. The Madras High Court said that its primary motive behind its 4 August 2021 order was the safety of the passengers. It further added that it will include suggestions to the current order and the law-making parliament will make the required rules. The Madras High Court had requested various stakeholders such as the Insurance Regulatory and Development Authority (IRDAI) to provide their suggestions on this matter to the court.
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