Zero Depreciation in Two-Wheeler Insurance

  • Author :
  • TATA AIG Team
  • Published on :
  • 12/05/2021

Having bike insurance is mandatory in India as per the Motor Vehicles Act, 1988. However, simply having insurance for a bike does not promise its complete protection. When you buy two-wheeler insurance, you have to take into consideration the depreciation value of your bike. Depreciation means a reduction in the value of your bike and its parts owing to its periodic wear and tear.

Comprehensive insurance for bike pays according to the Insured Declared Value (IDV) – meaning the current market value of your bike. Additionally, the cost of replacement of the bike’s rubber, plastic, and metal parts is only partially paid by your insurance provider. To prevent this from happening, it is recommended that you purchase a Zero Depreciation Cover along with your comprehensive bike insurance.

What is Zero Depreciation Cover in Bike Insurance?

Zero Depreciation is an add-on cover available with a motor insurance policy that allows you to get the complete claim settlement amount without any depreciation deductions. Also known as NIL Depreciation Cover, this add-on is the perfect enhancement to your bike insurance policy, especially if you have bought a new bike or a luxury bike with expensive parts.

Understanding Depreciation in Bike Insurance

The primary reason why you buy two-wheeler insurance is to secure your bike against financial liabilities that may occur in the future. Considering this, the depreciation value is an important component in evaluating your bike insurance cost.

The reduction in the value of your bike as it gets older with use is termed as depreciation. For example, if the value of your bike was ₹50,000 at the time of purchase, and its current market value is ₹30,000, then you have suffered a depreciation value of ₹20,000 on your bike. This current market value is determined considering the IDV. IDV is the maximum amount your insurance provider will pay if your bike is damaged beyond repair or if you are a victim of theft.

Benefits of Zero Depreciation Cover in Two-Wheeler Vehicle Insurance

Following are the benefits of opting for a Zero Depreciation Cover along with your comprehensive two-wheeler policy:

● It offers complete compensation for depreciable parts that require replacement. ● The entire cost of repair and replacement is borne during the settlement of the claim. ● Selective insurance providers also cover partial battery damages and tyres without considering the depreciation. ● You can purchase the Zero Depreciation Cover both when you buy two-wheeler insurance as well as at the time of bike insurance renewal. Here are the clauses to keep in mind before buying insurance for bike along with Zero Depreciation Cover: ● Check with your insurance company how many claims are permitted under this cover. ● Only certain two-wheeler models are allowed to claim the NIL depreciation without the excess.

When Should You Opt for a Zero Depreciation Cover?

The Zero Depreciation Cover is ideal for individuals who have newly purchased a vehicle and for those who are new to riding. Also, NIL Depreciation Cover is necessary if you have a luxury two-wheeler as the parts and components of such bikes are expensive to repair or replace. Considering that India reports the highest number of road-related accidents, a Zero Depreciation Cover can be helpful for every bike rider.

Will Your Premium Increase After Availing a Zero Depreciation Cover?

As a Zero Depreciation Cover is an additional rider to complement your comprehensive bike insurance policy, you will be expected to pay an extra premium. While your overall bike insurance cost will increase with the Zero Depreciation Rider, its benefits in the event of an accident far outweigh the negligible premium you pay for it.
Zero Depreciation Cover with Tata AIG Bike Insurance

The Tata AIG two-wheeler insurance policy protects your bike from all possible road risks. It comes with a choice of seven unique riders enabling the customisation of your two-wheeler policy. While our depreciation slabs are always pre-declared, policyholders have the option to waive the depreciation value by opting for a Zero Depreciation Cover. The Zero Depreciation Cover by Tata AIG compensates the insured bike with the entire amount of depreciation deducted on the value of replaced parts as part of the own damage claim.

To conclude

A Zero Depreciation Cover enables the wholesome financial protection of your bike. Its numerous benefits are especially helpful to those who have newly purchased a bike.


What is covered in Zero Depreciation bike insurance?

The inclusions for zero-depreciation two-wheeler policy are:

● Compensation for a bike’s depreciable parts such as nylon, rubber, plastic, etc. ● Repair and replacement compensation at the time of claim settlement ● Some insurance providers also cover damages to the battery or tyres

What is not covered under Zero Depreciation insurance?

The exclusions for zero-depreciation two-wheeler policy are:

● Damages owing to mechanical breakdowns and faults ● Routine wear and tear owing to ageing ● Total loss or total damage to the vehicle

**Should I take Zero Depreciation insurance? **

The Zero Depreciation Cover is particularly beneficial for individuals who have newly purchased a bike, are new to riding or have a luxury car with costly components.

Which is better – zero-depreciation or comprehensive insurance?

A Zero Depreciation Cover is an add-on that offers the complete claim settlement amount as and compensates for the repair and replacement of depreciable bike parts. A comprehensive insurance policy is a motor insurance plan that offers own-damage cover, third-party cover and personal accident cover to the owner-driver. It is better to buy a comprehensive motor insurance plan and enhance its coverage with a Zero Depreciation Cover.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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