Zero Depreciation in Two-Wheeler Insurance
- Author :
- TATA AIG Team
- ●
- Last Updated On :
- 09/05/2025
The value of your bike reduces over time due to depreciation. This means that in case of an accident or damage, the insurer will deduct the depreciation cost before making a claim payment. However, with a Zero Depreciation cover, you can avoid this deduction and get the full claim amount without factoring in depreciation.
A Zero Depreciation add-on ensures that you receive the entire cost of repairs or replacement for bike parts, excluding only deductibles and exclusions as per the policy terms. This is especially beneficial for new or high-end bikes, as repair costs can be expensive.
TATA AIG offers Zero Depreciation add-on to help you get maximum coverage against your bike policy without financial loss due to depreciation. In this guide, we will explain the zero dep bike insurance meaning, how this cover works, its benefits and why it is a smart choice for bike owners.
What is Zero Depreciation Bike Insurance?
Zero Depreciation, or Zero Dep, bike insurance is an add-on cover that ensures you receive the full claim amount without any deduction for depreciation. It is also known as bumper-to-bumper or nil depreciation cover and is available with comprehensive or own-damage two-wheeler insurance policies.
When you file a claim for repairs or replacement of bike parts, insurers usually deduct depreciation costs before making the payment. However, with a Zero Dep add-on, the insurer covers the entire cost of the depreciated parts as per the policy terms. This means your bike remains as good as new in terms of claim settlements.
It is important to note that Nil Dep insurance for bike benefits can only be claimed a limited number of times during the policy period, as mentioned in the policy document. Plus, this cover is not available with a third-party insurance policy and must be purchased as an add-on.
TATA AIG offers Zero Depreciation Cover to help bike owners get maximum financial protection against repair costs. It is a valuable option, especially for new or high-end bikes, ensuring you do not have to bear depreciation-related expenses during claims.
So, how does it work? 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.
Percentage of Depreciation in a Two-wheeler Zero Dep Insurance
Bike’s Age | Depreciation Percentage |
---|---|
0 - 6 months | 5% |
6 - 12 months | 15% |
12 - 24 months | 20% |
24 - 36 months | 30% |
36 - 48 months | 40% |
48 - 60 months | 50% |
What is Depreciation in Bike Insurance
Depreciation refers to the gradual decrease in the value of a two-wheeler over time due to wear and tear. In bike insurance, depreciation plays a crucial role in determining the claim amount you receive for repairs or replacements.
When a bike is damaged, the insurer does not cover the full cost of repairing or replacing certain parts. Instead, a percentage of the cost is deducted based on the material of the part, and the remaining amount has to be paid by the bike owner. This is because some parts, like plastic, rubber and fibre, degrade faster than others.
The table below shows the depreciation percentage applied to different bike parts:
Depreciable Bike Parts | Depreciation Deducted |
---|---|
Rubber, Nylon, Plastic Parts | 50% |
Fibreglass | 30% |
Tubes and Tyres | 50% |
Glass | 0% |
Since depreciation reduces the claim amount, many bike owners opt for a Zero Depreciation add-on, which ensures that the insurer covers the full cost of repairs without considering depreciation.
Also Read: Best Bikes Under 10 Lakhs
Depreciation Rate Comparison: With vs. Without Zero Depreciation Cover
The table below highlights the difference in depreciation rates for two-wheelers with and without the Zero Depreciation add-on under TATA AIG’s bike insurance policy.
Bike’s Age | Without Zero Dep (%) | With Zero Dep (%) |
---|---|---|
Less than 6 months | 50% | 0% |
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% |
Zero Depreciation Bike Insurance after 5 years | Decided mutually between TATA AIG and the policyholder | 0% |
With Zero Depreciation Cover, policyholders receive full claim benefits* without any depreciation deductions, ensuring maximum financial protection for their bikes.
*Note that you will still need to pay mandatory deductibles and pay for any uninsured parts.
How Zero Depreciation Cover Can Help a Bike Owner – An Example
Let us consider Amit, a young professional who recently bought a brand-new bike worth ₹1,50,000. To ensure maximum protection, he opted for a Comprehensive Bike Insurance Policy from TATA AIG, along with the Zero Depreciation Add-on.
One day, while commuting to work, Amit’s bike skidded on a wet road and collided with a pole. Fortunately, he was safe, but his bike suffered significant damages, including:
A cracked headlight
Damaged front mudguard (plastic part)
Scratched fuel tank (metal part)
Dented alloy wheels
Torn rubber grips on the handlebar
Repair Costs Breakdown
When Amit took his bike to an authorised garage, the repair costs were estimated as follows:
Damaged Part | Repair or Replacement Cost (₹) | Without Zero Dep (%) | Depreciation Amount (₹) |
---|---|---|---|
Headlight (Glass) | 5000 | 0% (No depreciation on glass) | 0 |
Mudguard (Plastic) | 3000 | 50% | 1500 |
Fuel Tank (Metal) | 10000 | 5% | 500 |
Alloy Wheels (Metal) | 12000 | 5% | 600 |
Handlebar Grips (Rubber) | 2000 | 50% | 1000 |
Total | 32000 | - | 3600 |
If Amit did not have the Zero Depreciation Add-on, he would have to bear the depreciation cost of ₹3,600 from his own pocket.
Since Amit opted for TATA AIG’s Zero Depreciation Add-on, he was not liable for any depreciation deductions. This means he received the full claim amount of ₹32,000.
Also Read: Fibre Parts Covered in Bike Insurance
What is Covered and Not Covered Under Zero Depreciation Add-on
Covered Under Zero Depreciation | Not Covered Under Zero Depreciation |
---|---|
Compensation for depreciable bike parts like nylon, rubber and plastic | Damages due to mechanical breakdowns and faults |
Repair and replacement costs during claim settlement | Routine wear and tear due to ageing |
Some insurers also cover damages to the battery or tyres | Total loss or complete damage to the vehicle |
Two-wheeler Insurance Types
Two-wheeler insurance can be categorised into three types:
Comprehensive Two-Wheeler Insurance
Standalone Own-Damage Bike Insurance
Third-Party Liability Insurance
Third-Party Liability Insurance
As per the Motor Vehicles Act, 1988, it is mandatory for all two-wheeler owners in India to have at least a Third-Party Bike Insurance policy. This cover protects against legal and financial liabilities arising from injuries, death or property damage caused to a third party due to your bike. However, it does not cover damages to your own vehicle.
Standalone Own-Damage Bike Insurance
Standalone Own Damage Bike Insurance Policy provides financial protection if your bike is damaged due to an unfortunate accident. While this policy does not cover third-party liabilities, it ensures that your bike is safeguarded against natural disasters, man-made incidents and fire-related damages. It also offers compensation in case of bike theft, giving you peace of mind and financial security.
Comprehensive Two-wheeler Insurance (with Add-ons)
A Comprehensive Insurance Policy provides broader coverage, including third-party liability and own damage protection. It covers damages caused by accidents, natural calamities, theft, fire and vandalism, ensuring financial security for the bike owner.
For enhanced protection, you can opt for add-ons along with your comprehensive policy. TATA AIG offers 8 valuable add-ons such as Zero Dep, Roadside Assistance, Return-To-Invoice and so on.
Comprehensive Bike Insurance vs. Zero Depreciation Add-on: Key Differences
Zero Depreciation is an add-on and not a standalone policy, meaning it must be purchased along with a comprehensive or own damage policy. A comprehensive policy provides broad coverage, and adding Zero Depreciation Cover enhances your claim benefits by eliminating depreciation deductions.
The table below highlights the key differences:
Factors | Comprehensive Bike Insurance | Comprehensive Insurance + Zero Depreciation Add-on |
---|---|---|
Premium Cost | Lower | Slightly higher |
Depreciation Deduction | Applied during claim settlement | Not considered |
Claim Settlement Amount | Lower, as depreciation is deducted | Higher, as full repair costs are covered |
Impact of Bike’s Age | Depreciation increases with age | Depreciation does not affect claims |
Repair Expenses Coverage | The owner bears part of the repair cost due to depreciation | Full repair cost is covered (except voluntary deductibles) |
Benefits of Zero Depreciation Add-on for Bike Owners
Full Compensation for Depreciable Parts: This add-on ensures that the cost of replacing depreciable parts such as plastic, rubber and fibre is fully covered.
Higher Claim Settlement: With Zero Depreciation Cover, the insurer bears the entire repair and replacement cost without factoring in depreciation, leading to a higher claim payout.
Coverage for Battery and Tyres: Some insurers, including TATA AIG, may also cover partial battery and tyre damages without considering depreciation.
Flexibility in Purchase: You can opt for Zero Depreciation Cover when purchasing a new policy or at the time of renewal.
Key Factors to Consider Before Buying a Zero Depreciation Cover
Not Applicable for Total Loss or Theft: This add-on does not apply if your bike is completely damaged beyond repair or stolen.
Higher Claim Payouts: With this cover, your claim amount remains unaffected by depreciation, ensuring a higher settlement for repairs and replacements.
Vehicle Age Limit: Most insurers, including TATA AIG, offer Zero Depreciation Cover only for bikes that are up to five years old.
No Coverage for Mechanical Failures: Damages caused by mechanical breakdowns or wear and tear are not covered under this add-on.
Who Should Opt for a Zero Depreciation Bike Insurance Cover?
Owners of New or Luxury Bikes: If you own a new, high-end, or premium bike, repairing or replacing its expensive parts can be costly. A Zero Depreciation Cover ensures that you don’t have to bear the depreciation costs.
Bikes Less Than 5 Years Old: Most insurers, including TATA AIG, offer this add-on only for bikes that are up to five years old. If your bike falls within this range, opting for this cover is a smart choice.
Riders in Accident-Prone Areas: If you frequently commute through high-traffic or accident-prone zones, this cover helps you minimise repair costs for accidental damages.
New or Inexperienced Riders: If you have recently learned to ride a bike, your chances of minor accidents are higher. This cover ensures that you do not have to worry about depreciation when making a claim.
Those Who Want to Avoid Out-of-Pocket Expenses: With Zero Depreciation Cover, the insurer pays the full claim amount for the repair or replacement of depreciable parts, reducing your financial burden.
Owners Who Want to Maintain Their Bike’s Aesthetics: If you cannot tolerate even minor dents or scratches on your bike and want it always to look new, this cover ensures that repairs are taken care of without factoring in depreciation.
How to Buy Zero Depreciation Cover for Bike with TATA AIG
Step 1: Go to the official TATA AIG website and navigate to the Bike Insurance section.
Step 2: Provide the required details such as:
Bike make and model
Registration number
Year of manufacture
Step 3: Choose between a Comprehensive Bike Insurance Policy or a Standalone Own Damage Policy—both of which allow you to add the Zero Depreciation Cover.
Step 4: From the list of available add-ons, select the Zero Depreciation Cover to enhance your policy benefits.
Step 5: Check the premium amount after adding the cover. Once satisfied with the coverage and cost, proceed to make the payment online through secure payment options.
Step 6: After successful payment, you will receive the Zero Depreciation Bike Insurance policy document via email. You can also download it from the website for future reference.
Will Your Premium Increase After Buying a Bike Insurance 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.
Also Read: How Zero Depreciation Affects Your Two-Wheeler Insurance Premium
A Few More Important Add-Ons from TATA AIG that You Should Consider
Return-to-Invoice Cover
In case of theft or total loss due to an accident, this add-on ensures that you receive the full invoice value of your bike, including road tax and registration charges. Unlike standard insurance, which only pays the Insured Declared Value (IDV), this cover helps you recover the entire purchase price, reducing your financial loss significantly.
Personal Accident Cover for Owner-Driver
Road accidents can have severe consequences, and this add-on provides crucial financial support in case of permanent disability or loss of life due to an accident. If the policyholder meets with a fatal accident, TATA AIG will offer a pre-determined compensation amount to their family, ensuring financial security during difficult times. This benefit is in addition to the sum insured under the main policy.
Roadside Assistance Cover
Unexpected breakdowns can leave you stranded, but with the roadside assistance add-on, help is just a call away. Whether you need towing, minor repairs, battery jump-start, fuel delivery or even emergency assistance, TATA AIG’s 24x7 support ensures that you are never left helpless on the road. Simply call 1800 266 7780, and our team will be there to assist you.
Also Read: Zero Dev Vs Return to Invoice
To Conclude
Zero Depreciation in bike insurance is a valuable add-on that ensures you get the full claim amount without factoring in depreciation. It is especially beneficial for new or high-end bikes, as it covers the full cost of repairs and replacements for depreciable parts. Unlike a standard comprehensive policy, which deducts depreciation before settling claims, this add-on helps you save on out-of-pocket expenses.
Before purchasing, it is important to compare two-wheeler insurance plans and check the benefits of a Zero Depreciation cover. This add-on is available only for bikes up to five years old and does not cover damages due to mechanical failure.
However, for those who frequently ride in accident-prone areas or want maximum financial protection, it is a smart choice. At TATA AIG, we offer Zero Depreciation as part of our comprehensive bike insurance policies, ensuring that your claims are settled fairly and without depreciation deductions.
Frequently Asked Questions (FAQs)
What factors influence the premium for Zero Depreciation cover?
The premium for Zero Depreciation cover is influenced by several factors, including the age of your bike, its make and model, your location, the Insured Declared Value (IDV) and the specific insurance plan you choose.
How much does Zero Dep insurance for bike cost?
The Zero Dep bike insurance price varies based on factors like the bike's age, make, model, location and IDV, as well as the insurer and the insurance plan you select.
Is Zero Depreciation cover useful for owners of older bikes?
Zero Depreciation cover is typically not recommended for bikes that are close to or older than five years. For older bikes, the depreciation benefit is minimal, making the add-on less useful.
Is Zero Depreciation cover beneficial for new bike owners?
Yes, Zero Depreciation cover is highly beneficial for new bike owners or those with bikes less than five years old. It ensures that you get the full claim amount without any depreciation deductions on parts.
What are the conditions for opting for Zero Depreciation cover?
To avail of Zero Depreciation cover, your bike must be less than five years old, and the cover must be added to a comprehensive bike insurance policy.
What is the difference between Comprehensive and Zero Depreciation bike insurance?
Comprehensive bike insurance covers damage to your bike from accidents, theft, fire, natural calamities and third-party liabilities. Zero Depreciation is an add-on that ensures no depreciation is deducted from the repair or replacement costs of bike parts during a claim.
Should I buy the Zero Depreciation bike insurance online?
Yes, purchasing the Zero Depreciation add-on online is a convenient option. You can easily visit the insurance provider's website or an insurance aggregator to buy the add-on and complete your purchase quickly.
What are the conditions for filing a claim?
Filing a claim is straightforward. Simply reach out to us, complete the necessary form, submit the required documents, and stay updated as we process your claim.
Is there an extra cost for Zero Depreciation Cover?
Yes, there is a marginal increase in the premium for Zero Depreciation Cover. However, this additional cost is well worth it, as it ensures you receive the full claim amount without any deductions for depreciation.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.
