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Zero Depreciation Two-wheeler Insurance Explained

Written by Sharad Bajaj
Updated On Aug 14, 20202 min read

Zero Depreciation Two-wheeler Insurance Explained

Be it an investment or an insurance, when it comes to returns, everyone wants it of a higher amount. But, as per the tenet of two-wheeler insurance, every bike, scooter or scooty has to face depreciation with time due to wear and tear, etc. The depreciation reduces the value of two-wheelers over the time, which ultimately lessens the claim settlement amount to be provided to you by the insurance company. Also, when a vehicle faces damages due to an accident or a road mishap, the repair expenses can be expensive. However, in such cases, an add-on cover namely zero depreciation, can help you out. To avail this cover to the fullest, let’s understand it first.

What Is a Zero Depreciation Bike Insurance?

A Zero Depreciation Bike Insurance is an add-on cover with which the insurance provider does not consider the depreciation of two-wheelers while settling the claim and will pay almost the actual cost of the two-wheeler parts to be replaced with zero deduction for depreciation.

For example, if you purchase a bike worth Rs. 1 lakh, but after some years its value depreciates to Rs. 50,000, it means, you could get a maximum of Rs. 50,000 as compensation, for the damages or wear and tear suffered by its parts, from your insurance provider. But, zero depreciation add-on cover does not let the value of the parts of your two-wheeler depreciate and make you receive almost its actual value.

How Zero Depreciation Bike Insurance Add-On Cover Works?

The zero depreciation add-on cover can be included in comprehensive or standalone own-damage bike insurance plans by paying an additional premium. It will help you gain a higher claim amount for the repaired or replaced parts of your two-wheeler. The depreciation for two-wheeler parts is computed as per the rate given in the following table.

In addition to the standard depreciation rates, the below table will also show the difference in the depreciation rate with nil depreciation cover:

Part of Bike

Rate of Depreciation Without Zero Depreciation cover

Rate of Depreciation With Zero Depreciation cover

Paint Work / Rubber/ Nylon/ Plastic Parts, Tires and Tubes, Batteries and Airbags Parts



Fiberglass parts



Glass parts



For all other parts of your two-wheeler, the rate of depreciation would be as per the following criteria with and without zero depreciation cover:

Age of Bike

Rate of Depreciation Without Zero Depreciation cover

Rate of Depreciation With Zero Depreciation cover

Under 6 months



6 months to 1 year



1 – 2 years



2 – 3 years



3 – 4 years



4 – 5 years



5 – 10 years



Above 10 years



However, different insurance providers allow the usage of zero depreciation cover in different manners. Some provide the bike insurance claims twice or thrice a year, while some extend their support to the highest level by allowing their policyholders to avail the claim with zero depreciation cover for unlimited times.

Inclusions of Zero Depreciation Add-On Cover

The zero depreciation add-on cover when added to two-wheeler insurance plan offers the following benefits:

  • Compensation for the cost of repair and replacement at the time of claim settlement
  • Compensation for depreciable two-wheeler parts like rubber, plastic, fibreglass and nylon
  • Some plans cover partial damage to battery and tyres without implementing depreciations

Exclusions of Zero Depreciation Add-On Cover

The zero depreciation add-on cover when added to two-wheeler insurance plan does not offer the following:

  • Total damage or loss to the two-wheelers
  • Damages occurred due to mechanical faults
  • Any kind of uninsured perils are not covered

Take Away

A standard two-wheeler insurance policy becomes more beneficial with zero depreciation cover. Although, this add-on cover comes with a limited inclusions, still it is a great choice for new two-wheeler owners. Also, several insurers allow the usage of this add-on cover for more than one to unlimited times in a policy term, which makes you earn more. Hence, opt for this add-on cover and get the full value of your two-wheeler insurance claim.

Also Read:
Difference Between Third-Party & Comprehensive Two Wheeler Insurance

Benefits of Long Term Two Wheeler Third Party Insurance

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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Written by Sharad Bajaj
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 Sharad is an insurance industry veteran who has managed motor insurance products for over a decade. He helped set up and scale the motor insurance vertical for a leading insurance company in his previous stint. In his spare time, Sharad likes to read and be in tune with nature.

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