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What is Zero Depreciation Bike Insurance Cover?

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What is Zero Depreciation Bike Insurance Cover?

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Every bike owner knows that it is compulsory to purchase bike insurance as per the law. But if you own a bike and are unaware of zero depreciation bike insurance coverage, you could be missing out on a product that might be very beneficial to you.

First, let's consider the key term here - depreciation. In this context, depreciation indicates the loss in the value of your bike as you use it. This overall decrease in value occurs as each individual bike component shows signs of wear and tear.

A simple example of this would be when you are considering selling your old bike to buy a new one. If it's been used for a couple of years or so, no one will buy it from you at the price you paid. Something similar occurs in the case of standard bike insurance.

Standard Bike Insurance vs Zero Depreciation Cover

Suppose you need to replace or repair certain parts of your bike damaged in an accident with a standard bike insurance claim. In that case, the payout you receive from your bike insurance provider will be based on the depreciated value of those parts.

Here is a table with the indicative rate of depreciation for two-wheelers over various time periods:

Age of the Vehicle Rate of Vehicle Depreciation
Within 6 months 5%
6 months - 1 year 15%
1 year - 2 years 20%
2 years - 3 years 30%
3 years - 4 years 40%
4 years - 5 years 50%


Depending on the age of your bike, you could face a substantial out-of-pocket expense in the event of an accident.

If you purchase a zero depreciation add-on, also called the nil depreciation add-on, your insurance company will cover the entire cost of repairs. This is because, with this add-on, the insurance company does not take into consideration the depreciated value of the parts. From the perspective of your insurer, your bike is as good as new.

Benefits of Zero Depreciation Bike Insurance

1. Enhanced Coverage

You get extensive financial protection for your bike's plastic or fibre-made components, which is generally not covered under standard bike insurance.

2. Bigger Claim Settlement

You receive a larger settlement for your bike insurance claims since the insurer won't take away the amount of accumulated depreciation on the bike's damaged components.

3. Up to 2 Claims

You can make two claims per policy period. This applies to both new as well as renewed two-wheeler policies.

4. Added Benefits

Some insurers provide coverage for things like key replacement, routine maintenance, towing help, and roadside assistance when you purchase zero depreciation bike insurance.

Inclusions Under Zero Depreciation Bike Insurance

Since your bike is made up of a lot of components and not just the engine and body, even the material of various parts is taken into consideration when calculating the premium value for your insurance.

Here are the things that are covered under zero depreciation bike insurance -

  • Any damage that has occurred due to normal wear and tear of components made of materials like nylon, rubber, fibreglass, etc.
  • Replacement and repair costs of the parts as quoted in the insurance policy
  • Losses sustained because of partial damage to the battery and tyres

Exclusions Under Zero Depreciation Bike Insurance

  • Maximum depreciation coverage is given up to a vehicle age of three to five years only.
  • It does not cover normal wear and tear of parts requiring replacement or repair.
  • A claim will be accepted only if the risk listed in the agreement has caused the damage.
  • In cases of total loss (bike theft or flooding) or constructive total loss, you are not eligible for the zero depreciation benefit.

Zero Depreciation Bike Insurance Vs Standard Bike Insurance

1. Premium

The cost of the premium for zero depreciation bike insurance is much higher than standard bike insurance, but the coverage is higher in the case of zero depreciation bike insurance.

2. Claim Settlement

In the case of zero depreciation bike insurance, you get full compensation at the time of the claim. However, with standard bike insurance, various factors like the age of the vehicle, the depreciable value of the parts and more will be considered at the time of claim.

3. Age of the Vehicle

As mentioned earlier, zero depreciation bike insurance will consider your bike as good as new, but it is available only for a short period of time from the time of purchase. If your bike is old or used beyond a certain period of time, you will have to opt for standard bike insurance.

4. Cost of Plastic Fibre

Normally, the cost of fibre and repairs is partially borne by the insurer and insured. However, in the case of zero depreciation bike insurance, the entire cost is borne by the insurer.

Things to Keep in Mind When Getting Zero Depreciation Bike Insurance

  • Your bike must be no older than 3-5 years
  • It doesn't encourage reckless driving
  • There is a limit on the total number of annual claims
  • You can get repairs done only at network garages

Knowing what is zero depreciation in bike insurance, along with its pros and cons, helps you make an informed decision that's more financially beneficial for you.

Frequently Asked Questions

1. What will be the cost of adding zero depreciation add-on cover to your policy?

A zero depreciation add-on is always beneficial for your bike insurance. The depreciation add-on cover is generally 10-15% higher than the standard bike insurance plans.


2. What is the difference between IDV and zero depreciation?

Insured Declared Value (IDV) Zero Depreciation
The final amount of money offered by an insurance provider in the event of theft or complete loss of a vehicle is known as the Insured Declared Value, or IDV. The progressive decrease in an item's value is referred to as depreciation. Depreciation is the term used to describe a product's value decreasing because of normal wear and tear.
The IDV is calculated after deducting the depreciable value of your bike during claim settlement. Offers settlement coverage without considering the depreciation value.


3. What is covered with zero depreciation insurance?

Depreciable bike parts like nylon, rubber, and plastic are compensated, as are repair and replacement costs paid out at the moment the claim is resolved. Some insurance companies additionally cover battery and tyre damage.

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