Importance of Zero Depreciation Bike Insurance-Wikipedia of Finance-WikiFinancepedia

Importance of Zero Depreciation Bike Insurance


As per RTO rules and regulations, a vehicle owner must get two-wheeler insurance for their vehicle. Insurance offers coverage and compensation for loss and damaged parts of the vehicles, however, the insurance company takes various factors like vehicle’s age, performance quality, etc. into consideration to derive claim amount value. This happens due to depreciation in the Insured Declared Value (IDV) mentioned by the policyholder during policy purchase.

The zero depreciation bike insurance feature allows the policyholder to claim and receive the total IDV amount in the claim for the permanent damage or loss of the vehicle/ vehicle parts.

What is Zero Depreciation Bike Insurance?

Let’s define depreciation first before we get into what zero depreciation involves. The term “depreciation” refers to how the worth of your bike decreases over time. If your bike cost Rs. 70,000 new and is now worth Rs. 30,000, the depreciation is Rs. 40,000.

If you have zero depreciation insurance on your bike, the insurance company will practically pay the entire cost of replacing parts, including 0% depreciation. To put it simply, zero-depreciation coverage means that your insurer will consider your bike to be in like-new condition.

Key Highlights of Zero Depreciation Bike Insurance

Some of the key highlights of the zero depreciation bike insurance feature are –

  • It is an add-on feature that can be added to the policyholder’s current bike insurance plan.
  • The policyholders are liable to get a complete IDV amount as compensation for the loss/ damage of the vehicle.
  • The claim settlement procedure becomes simple and faster.
  • 360-degree vehicle damage coverage. The policyholders can also claim coverage for vehicle components made of plastic or fibre.
  • The policyholder can avail of the benefits of the zero depreciation bike insurance feature during vehicle modification and adjustments.

Importance of Zero Depreciation Bike Insurance

Considering the zero depreciation bike insurance feature is an add-on facility, some policyholders are reluctant to pay a little extra for it, however, it is necessary to understand the importance and benefits of this add-on facility –

Higher Claim Settlement Amount

The standard procedure of evaluating claim settlement amount considers depreciation value, leading to reimbursement of a small amount of money, whereas, with the zero depreciation bike insurance feature, the insurance company skips the procedure of evaluating the claim settlement amount and disburses the IDV amount to the policyholder.

Long-Term Investment

Adding this add-on facility to the bike insurance plan might lead to a hike in the premium amount, however it is beneficial in the long run. The policyholder will not have to worry about the repairing and servicing expenses of the vehicle.

Suited for New Vehicles

The insurance company initially introduced the zero depreciation bike insurance feature for new vehicles with a maximum age of 2 years. The policyholders can claim the benefits of this add-on facility twice a year and render proper maintenance to the vehicle without spending from their pocket.

Zero Depreciation Bike Insurance Vs Normal Bike Insurance

The following provides a clear contrast between a traditional insurance policy and a policy with zero deprecation insurance for bikes:

Settlement of Claims

The settlement of a claim under a basic bike insurance policy is influenced by the age of the vehicle and the depreciation value of the parts. If you have bike insurance zero dep protection, however, you will be compensated in full at the time of the claim.

Premium Price

Even if the cost of a two bike insurance zero dep cover policy is much higher than the cost of a standard policy, the long-term financial results are significantly better.

Repair Costs as Well as the Cost of Plastic Fibre

Repairs and plastic fibre components are typically covered by insurance. However, with bike insurance zero dep coverage, the insurer will pay for this, significantly lowering the policyholder’s costs.

How Old is the Vehicle?

Because the policy term (usually) covers two claims during the policy term, zero dept insurance only covers vehicles up to a certain age. Because basic insurance does not take the age of the car into account, you will most likely have to settle for standard coverage if your car is fairly old.

Zero Depreciation Bike Insurance Inclusions

  • Coverage and Compensation for vehicle components made of plastic, nylon, fibre, etc.
  • Reimbursement through a claim for repairing and replacement of vehicle parts.
  • Some insurance companies also cover battery repair and replacement costs[1] .

Zero Depreciation Bike Insurance Exclusions

  • Damage or loss incurred in the vehicle parts due to breakdown or mechanical errors
  • Wear and Tear caused due to regular usage
  • Damage incurred during the policy grace period


So if you have recently purchased a new bike for yourself, it is important to add a zero depreciation bike insurance feature in your insurance plan that will take care of all the unexpected vehicle expenses without considering depreciation.

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