India, May 13 — There are broadly two types of motor insurance: car and bike insurance. Whether you are buying a car or bike, you must purchase a bike or car insurance policy to protect your vehicle against potential damages financially. While a motor insurance policy covers most things, it still does not consider vehicle depreciation costs. But now, you can also protect your vehicle against depreciation costs. Wondering how? Well, the answer is Zero Depreciation cover. Read on to understand zero depreciation coverage in car and bike insurance.
Understanding Zero Depreciation Cover
Zero Depreciation cover is a type of add-on that lets motor insurance policyholders claim the complete amount irrespective of the depreciation costs. This means that regardless of the depreciation costs that might have been incurred over the years, you will still get the complete claim amount with this cover. It is also known as nil depreciation cover or bumper-to-bumper cover.
Let us understand this with an example: There are two individuals whose car got damaged in an accident. The first individual expected to get a high claim amount as he had a comprehensive car insurance policy. He missed reading the policy terms and conditions and was unaware that depreciation costs would be included whenever he raise a claim. Thus, he ended up paying a significant amount of money from his pocket to repair the car. On the other hand, the second individual had read the policy while buying and included the Zero Depreciation cover at that very time. Thus, he spent almost nothing on the total repair cost during the claim settlement.
This example shows the importance of getting a Zero Depreciation Cover with your motor insurance policy to get a complete claim amount and face no financial loss. So, get zero depreciation coverage for your vehicle before it’s too late.
How is Depreciation Calculated?
The IRDAI based on age has determined the depreciation percentage as mentioned in the table below:
| Vehicle Age | Rate of Depreciation |
| Less than 6 months | 0% |
| 6 months – 1 year | 5% |
| 1 year – 2 year | 10% |
| 2 year – 3 year | 15% |
| 3 year – 4 year | 25% |
| 4 year – 5 year | 35% |
| 5 year – 10 year | 40% |
| More than 10 years | 50% |
Who Should Get Zero Depreciation Cover?
Are you confused about whether you need zero depreciation cover for your vehicle or not? Don’t worry, we are here to help you. Here is a list of individuals who needs to get a zero depreciation cover:
New vehicle owners
Expensive or luxury car owners
Those who are new to driving
Those who want to reduce their pocket expenses
How to Buy Car/Bike Insurance with ACKO?
Whether you want to buy a third party bike insurance or any other type of car and bike insurance policy with ACKO, here are the steps you need to follow:
ACKO App
Download the ACKO app on your mobile phone
Go to car insurance or bike insurance option available depending on what you want to buy
Enter the vehicle registration number and click on ‘check prices’
Provide details like make and model, fuel type, registration year, etc
A list of plans will be visible on your screen
You will also be able to see a list of add-ons
Select a suitable plan along with add-ons and proceed with premium payment
Once you complete the payment, you will receive the policy details
ACKO Website
Go to the car/bike insurance on the ACKO website
Enter car/bike registration number
Click on ‘check prices’ and proceed further
Provide all the required details like make and model, fuel type, registration year, Pincode, mobile phone number, etc
From the list of plans available, select a suitable one along with the add-ons
Complete the premium payment, after which you will receive the car/bike insurance policy details
Summing Up
So, include a Zero Depreciation cover in your motor insurance plan and enjoy complete claim settlement irrespective of the depreciation costs. Just remember that by including this add-on to your plan, the premium will become higher.