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Zero Dep Vs. Comprehensive Bike Insurance Policy - Which is Better?

Team AckoJul 22, 2021

One of the mandatory documents required to ride a two-wheeler in India is the insurance certificate. For that, you need to insure your bike with the Third-party Liability Plan. For broader coverage against accidental damages to your bike, you should insure it with the Comprehensive Bike Insurance Plan. There is also the Zero Depreciation cover that extends the Comprehensive Insurance Plan’s coverage. But, what is the difference between the two insurance covers? Read ahead to learn about Comprehensive insurance vs. Zero Depreciation for bikes so that you make the right decision while insuring your vehicle.

Zero Dep vs Comprehensive Bike Insurance Cover Which One is Better

What is Zero Depreciation Bike Insurance Cover?

Over a period of time and usage of your vehicle, the value of the bike depreciates due to regular wear and tear. Hence, the value of your bike also decreases. 

The decline in the value of your two-wheeler is known as depreciation. Therefore, when you raise a claim against accidental damages to your bike, ACKO will pay the repair bill after considering the depreciation factor of the parts being replaced. Hence, you may not be compensated for the entire repair bill.

To negate the depreciation factor and get the maximum claim amount, you can include the Zero Depreciation add-on. This add-on is also known as Nil Depreciation cover or Bumper to Bumper cover.

You can only purchase the Zero Depreciation add-on with the Comprehensive Bike Insurance Policy and not with the mandatory Third-party Liability Plan.

What is Comprehensive Bike Insurance Cover?

The Comprehensive Bike Insurance Plan is an ideal insurance cover for your two-wheeler. It comes bundled with the mandatory Third party Bike Insurance Plan and the Own Damage (OD) insurance.

This plan offers broader coverage as it covers third party liabilities such as injury or death of the third party or damages to their property. The OD plan provides coverage against accidental damages to your vehicle arising due to an accident, fire, natural or man-made calamities (floods, riots, etc.), theft of the bike, and total loss (damages that are beyond repair). 

While this plan provides coverage against damages or losses to your bike, depreciation will be considered before the claim is settled.

Difference Between Zero Depreciation and Comprehensive Two-wheeler Insurance

Here is the Zero Depreciation bike insurance vs. Comprehensive bike insurance in a table format.

Factors Comprehensive Bike Insurance Plan Comprehensive Bike Insurance Plan + Zero Depreciation Add-on
Rate of Premium Lower Slightly higher amount
Depreciation It will be considered while settling claims. It will not be considered.
Amount of Claim Settlement It will be lower since depreciation is considered. It will be higher since depreciation is not considered.
Age of the Vehicle The depreciation of the bike will increase as it ages. The depreciation is not considered.
Coverage of Repair Expenses A part of the repair bill has to be borne by you since depreciation will be considered. The total repair bill is covered except for the voluntary deductibles.

Inclusions and Exclusions of Zero Depreciation Bike Insurance Add-on

Here are the details of the inclusions and exclusions of the Zero Dep Bike Insurance Add-on.

Inclusions

  • Cost of rubber, plastic, fiberglass, and nylon parts

  • Usually, you can claim up to two times during the policy period

Exclusions

  • Depreciation factor of tyres and tubes

  • Will not be applicable in case of a total loss (damaged beyond repair)

  • Regular wear and tear

  • Electrical or mechanical failure

  • Theft of the bike

  • Damages caused due to uncovered risk of the primary policy

Comparison of the Rate of Depreciation in Two-wheelers With or Without Zero Depreciation Cover

Here is a table that compares the depreciation rate* in two-wheelers with or without the Zero Dep add-on.

Age Without Zero Dep (%) With Zero Dep (%)
Less than 6 months 5 Nil
6 months to 1 year 15 0
1 to 2 years 20 0
2 to 3 years 30 0
3 to 4 years 40 0
4 to 5 years 50 0
More than 5 years To be mutually decided between ACKO and policyholder. 0

Rate of Depreciation in Two-wheeler Parts

Here is a table that compares the depreciation rate* in two-wheeler parts with or without the Zero Dep add-on.

Two-wheeler Parts Without Zero Dep (%) With Zero Dep (%)
Plastic, rubber, and nylon 50 0
Glass 0 0
Fiberglass 30 0
Wooden parts Depreciation is deducted as per the age of the car 0

*Note: The depreciation rate is indicative unless specified in the primary policy of the Zero Depreciation add-on.

Benefits of Comprehensive Bike Insurance Policy

Here are the reasons why Comprehensive Bike Insurance Policy is beneficial.

  • Coverage against third-party liabilities (accidental death or injury/damages to their property)

  • Coverage against damages to your vehicle due to an accident

  • Coverage against damages to your vehicle due to natural calamities (floods, cyclones, storms, earthquakes, etc.)

  • Coverage against damages to your vehicle due to man-made calamities (riots, strikes, vandalism, etc.)

  • Coverage against losses due to the theft of the bike

  • Coverage against losses due to total loss (damaged beyond repair)

  • Access to valuable add-on covers that extend the coverage of the primary plan

Which Type of Two-wheeler Insurance Policy is Right for You?

Vehicle insurance for your two-wheeler should provide more comprehensive coverage that includes coverage against damages to your vehicle and third-party liabilities. It should also offer you access to a wide range of add-ons that add value to the primary policy. 

It is recommended you purchase the Comprehensive Bike Insurance Plan for broader coverage since it comes bundled with the Third-party Liability Plan and Own Damage cover. Additionally, you have the option to include the Zero Depreciation add-on that extends the insurance coverage for your vehicle.

Frequently Asked Questions

Here are some commonly asked questions about the Zero Depreciation add-on and Comprehensive Bike Insurance Plan.

Is the Zero Depreciation add-on beneficial for two-wheelers?

While you may have to pay a higher premium, the Comprehensive Bike Insurance Plan, along with the Zero Depreciation add-on cover, helps you save out-of-pocket expenses since depreciation is not considered during the claim settlement.

Does the Comprehensive Two-wheeler Insurance Plan include Zero Depreciation?

No, you have to buy the Zero Depreciation add-on separately when you purchase or renew the Comprehensive Bike Insurance Policy.

Who should opt for the Zero Dep cover?

If you are planning to buy a new two-wheeler or own a new vehicle, it is suggested that you opt for the Zero Dep add-on with the Comprehensive Bike Insurance Plan.

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