 "Key differences between third party, comprehensive & zero depreciation bike insurance coverage")
One often finds themselves at crossroads when it comes to selecting an ideal bike insurance policy, one that can fit both - the budget and the requirements. Well, who doesn’t want the ultimate best for their bike? The confusion is real; especially when you miss out on comprehending the minuscule differences between the myriad of options. Get ready to clear your mind, because this article is about to waive off all your dilemmas.
Before we get to the differences, let’s understand that there are two broad categories of two-wheeler insurance, based on coverage - third party insurance and comprehensive insurance. Let’s learn about them, their add-ons, and their limitations.
What is Third-Party Two Wheeler Insurance Cover?
Also known as ‘act only’ insurance, in this case, the firm covers damage to the third party in case of an accident, collision, or damage.* The insured bike and person are protected from the legal obligations towards the third party, who is also involved. The main purpose of this bike insurance is to protect you from any third-party related losses and damages and it provides for just that, along with covering you in the eyes of the law.* It is mandatory to have at least this insurance, if you want to drive legally on the road. And honestly, when this insurance is cheaper than the fines levied if found riding without the insurance, who would choose the latter?*
* Standard T&C Apply
Limitations of a Third-Party Bike Insurance
The sad truth about this deal is that it doesn’t cover for your bike’s own damages or losses; whether they stems from an accident, collision, fire, or even a natural calamity. Moreover, there is no way that you can customize your bike insurance policy with add-ons, IDVs or covers. Theft too isn’t compensated for.
For riders, securing their own bikes is primitive. And so, most people opt for Own Damage insurance cover rather than Third-Party coverage. This brings us to Comprehensive Bike Insurance which combines Third Party Liability Coverage with Own Damage Coverage.
What is a Comprehensive Two Wheeler Insurance Cover?
As the name implies, Comprehensive Insurance is a complete package for your bike’s welfare. It incorporates the cover for the damage incurred by a third party along-with the damage incurred by your bike in the case of unfortunate events like theft, accident, fire, riots, strikes, damage while traveling, terrorist activities, and even natural calamities.* It is quite prudent to select this insurance cover as it saves you from hefty expenses that might incur in the future. Along with that, financial assistance is provided in case your two-wheeler vehicle is damaged, loss or requires repair or replacement. This saves you from sustaining high repair costs.* Though the comprehensive bike insurance premium rates are higher in comparison to a third-party bike insurance policy, it provides an extensive policy coverage for an array of unforeseen situations.*
* Standard T&C Apply
Limitations of a Comprehensive Bike Insurance:
This policy does not however cover for your bike’s natural wear and tear. It cannot protect your bike from its timely depreciation over time. Usually, unless you’ve taken a specific add-on, the fiber and rubber parts of your bike aren’t fully covered within a standard bike insurance. As a standard rule, any bike insurance won’t be able to cover for consequential losses or damages caused due to a nuclear attack, war or driving under the influence of drugs and alcohol.
Despite of an overall cover under the comprehensive policy, your bike is still at risk of depreciation The wear and tear on your bike can result in depreciation over time. Depreciation charges are by default deducted from your claim amount at the time of settlement.
However, you can do away with the depreciation charge by opting for an add-on cover known as Zero Depreciation Cover. *The uniqueness of this cover makes it less of an add on and more of a policy cover in itself.
* Standard T&C Apply
What is Zero Depreciation Two-Wheeler Insurance Cover?
With the passage of time, as your two wheeler ages; the wear and tear is bound to deteriorate its value. This fact is worrisome for many bike insurance policyholders as it will give them a lesser value as a compensation incase of an unfortunate event. To avoid depreciation lowering your two-wheeler insurance claim amount, an add-on cover known as Zero Depreciation Cover is purchased. *Under this cover, your two-wheeler will be considered to be as valuable as on the day you purchased it from the market. Commonly known as the bumper to bumper insurance cover, this zero depreciation cover is the most selling as it secures the depreciation amount of your claim. Generally, it is available for bikes up to 5 years of age. Under this cover, all the parts of your bike will be insured by 100% except tubes, tyres, & batteries which will be covered at 50%. However a surge in premium can cover all the parts almost 100%. In short; higher claim, higher compensation and enhanced coverage.* Isn’t that best suitable for new drivers or the ones with luxury vehicles in accident prone areas?
* Standard T&C Apply
Limitations of a Zero Depreciation Bike Add-On Insurance.
This cover too, has a set of limitations. The policy does not cover loss or damage caused due to an uninsured risk, hazard or mechanical breakdown. The routine wear and tear of insured vehicles is also not catered to. Loss or damage to items that are not insured such as tyres, bi-fuel kit, and gas kits is a separate liability. The duration of the zero depreciation add-on cover is around 1 year and the policyholder should renew it annually to avail the benefits of the cover.* It costs almost 15% of the bike insurance premium, so it could be difficult to pay at first, although with time, the compensation will prove to be significantly greater than the policy premium. *
* Standard T&C Apply
Conclusion:
Now that you’ve understood the difference between the three most common insurance plans, it’s no secret that a comprehensive two wheeler insurance offers a fair amount of coverage in comparison to a mandatory third party insurance. Nevertheless, if you intend to fully protect your bike and receive a maximum claim amount, a zero depreciation cover as an add on is a must have. *It is better to pay a higher premium annually rather than a higher cost on repairs.
* Standard T&C Apply
‘Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.‘
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