Bumper to Bumper Cover in Car Insurance Policy

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:

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:

The zero depreciation is the other name 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:

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:

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:

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.

The depreciation rates as mandated by the IRDAI is as mentioned in the table below:

Typically, the depreciation rate for the different car parts is as following:

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 as it does not provide coverage for thehh following:

In the section below, let’s take you through the differences between Bumper to Bumper and Comprehensive 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.

While Bumper to Bumber Insurance provides a host of advantages, it is not mandatory in India. Unlike third-party insurance, Bumper to Bumper Car Insurance is not a legal mandate. However, with this cover, you can enjoy the benefit of getting complete claim amount despite the depreciation costs. This is one of the primary reasons why many car owners opt for this cover to reduce their out of pocket expenses if there is any damage to the insured vehicle.