Updated on 10-04-2025
Are you a proud owner of a sleek, powerful motorcycle you have poured your heart and soul into? Do you spend hours polishing its chrome and tinkering with its engine, ensuring it is always in top-notch condition? If so, then you know that the upkeep of your prized possession can be expensive. And, let's face it, regardless of your efforts, the value of your bike depreciates each year, and after a few years, reselling it will hardly get you any money. Furthermore, in the event of an accident while riding your bike, the insurer will only pay out after accounting for depreciation.
What is a Zero Depreciation Add-on?
The zero depreciation add-on kicks in to help you avoid depreciation and get the most out of your two-wheeler insurance. Zero Depreciation Cover is a type of add-on or rider to a comprehensive bike insurance policy that provides complete coverage without accounting for any depreciation in the value of the insured bike or its parts. In case of an accident or damage to the bike, the insurance company will cover the entire cost of repair or replacement of the damaged parts without any deduction for depreciation.
This policy's inclusions are straightforward. Here's what you should learn about.
- This rider compensates for the cost of replacement and repair at the time of claim settlement without considering the depreciation of the parts, including fibreglass, nylon, plastic parts, and rubber.
- Few insurers may also compensate for the battery and tires without taking into account the depreciation.
- You can buy this cover only at the time of purchasing a new policy or renewing an existing plan.
- The number of claims allowed under zero depreciation rider in a policy year can vary based on the insurance company and the policy’s terms and conditions.
Difference Between Comprehensive Policy and Zero Depreciation Bike Insurance
While both comprehensive and Zero Depreciation bike insurance aim to provide extensive coverage, they differ in terms of claim settlements and cost implications.
Comprehensive Bike Insurance:
- Depreciation Deduction: In a standard comprehensive policy, the insurer factors in the depreciation of bike parts during claim settlements. This means you'll have to bear the cost of the depreciated amount for parts that need replacement or repair.
- Lower Premium: Since depreciation is considered, the premium for a comprehensive policy without the Zero Depreciation add-on is generally lower.
Zero Depreciation Bike Insurance:
- No Depreciation Deduction: With the Zero Depreciation add-on, the insurer does not deduct the depreciated value of parts during claim settlements, ensuring you receive the full claim amount for repairs or replacements.
- Higher Premium: Opting for this add-on increases the premium of your two-wheeler insurance due to the enhanced coverage it offers.
Illustrative Example:
Suppose your bike's plastic part gets damaged, and the replacement cost is ₹2,000.
- With Comprehensive Policy: If the depreciation rate for plastic parts is 50%, the insurer will deduct ₹1,000 as depreciation. Thus, you'll receive ₹1,000 from the insurer and bear the remaining ₹1,000 yourself.
- With Zero Depreciation Add-on: The insurer will cover the full ₹2,000 replacement cost without any depreciation deduction, resulting in no out-of-pocket expense for you.
This example highlights how the Zero Depreciation add-on can lead to significant savings during claim settlements.
When Can You Avail Zero Depreciation Bike Insurance?
Opting for a Zero Depreciation add-on is particularly beneficial under the following circumstances:
- New Bike Owners: If you've purchased a new bike, especially a high-end model, the Zero Depreciation cover ensures that the full value of parts is covered without depreciation deductions.
- Expensive or Premium Bikes: Owners of premium bikes with costly parts can benefit from this add-on, as it covers high replacement costs without considering depreciation.
- Riders in Accident-Prone Areas: If you frequently ride in areas with high traffic density or poor road conditions, the likelihood of accidents increases. The Zero Depreciation cover can be advantageous in such scenarios.
- Inexperienced Riders: New or less experienced riders with a higher risk of minor accidents can find this add-on useful to minimise repair costs.
Conclusion
A Zero Depreciation add-on in two-wheeler insurance offers comprehensive protection by covering the full cost of repairs or replacements without accounting for depreciation. While it comes at a higher premium, the financial benefits during claim settlements can be substantial, especially for new or high-end bikes. Assess your two-wheeler's age, usage, and the associated risks to determine if this add-on aligns with your insurance needs. By making an informed decision, you can ensure optimal coverage and peace of mind on the road.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.