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Zero Depreciation Two-Wheeler Insurance

What Does Depreciation Mean?

Depreciation is a natural phenomenon that reduces the value of an asset over time. Just like every other asset, the value of a two-wheeler also diminishes with time. By default, the responsibility to bear the depreciation cost amount rests with the owner and not the bike insurance company.

Therefore, at the time of claim settlement, the insurer deducts the cost of depreciation incurred by the insured’s two-wheeler from the claim amount. This makes the policyholder get a lesser amount of compensation from the insurer. However, a policyholder can shift the burden of bearing the cost of depreciation from himself/herself to the insurance company with the help of a zero depreciation cover.

What is Zero Depreciation Bike Insurance Cover?

A zero dep two wheeler Insurance, also known as nil depreciation and bumper-to-bumper cover, is a popular two-wheeler insurance add-on cover. It can opt with a comprehensive as well as a standalone own-damage two-wheeler insurance policy. It provides 100% depreciation coverage for all the parts of your two-wheeler except tyres, tubes and batteries which are covered at 50%. Most Insurance companies allow 2 zero depreciation claims during the tenure of a policy, however, there are some exceptions like IFFCO Tokio General Insurance, Royal Sundaram General Insurance Company, New India Assurance Company which allow the unlimited number of zero depreciation claims during the tenure of a policy.

Zero Depreciation Bike Insurance Cover should ideally be opted by the following:

  1. New drivers
  2. New two-wheeler owners
  3. People living in accident-prone areas
  4. People who have luxury two-wheeler which has expensive parts.

Compare: Depreciation in Two Wheeler Insurance with & without Zero Dep Cover

Age of Two-wheeler

Depreciation Without Zero Dep Cover

Depreciation With Zero Dep 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



Applicable Rate of Depreciation on Two Wheeler Parts

Part of Two-wheeler

Rate of Depreciation Without Zero Depreciation

Rate of Depreciation With Zero Depreciation

Rubber/nylon/plastic parts



Fibre glass parts



Glass parts



Disclaimer: This article is issued in 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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Benefits of Zero Depreciation Bike Insurance Cover

Highlighted below are the benefits of a two-wheeler insurance policy with zero depreciation cover:

  • Higher Claim Amount

Prior to settling claims for the repair of your bike, the insurance company considers the depreciation rate for different parts of the bike. Different parts of bikes have different depreciation rates, moreover the claim rates also get affected based upon the age of your two wheeler.

  • Enhances The Coverage

A zero depreciation add on cover enhances the basic coverage of your two wheeler insurance policy, and almost reduces your expenses to zero. By investing a little amount for the add on cover, you get a better claim amount that will also enhance your savings.

  • Repair Cost Without Depreciated Value

Any expenses incurred by you related to replacement or repair of the bike’s insured parts are worked out without taking into account the depreciated value.

How To Purchase Zero Depreciation Bike Insurance Cover?

With the onset of technology, purchasing a zero depreciation cover alongside the basic plan for your bike is very easy. The policyholder can easily purchase the add on cover online at the time of buying or renewal of your bike insurance policy. You can simply choose the zero depreciation cover when you are buying a comprehensive plan for your bike insurance.

What All Things Are Included In Two Wheeler Insurance Policy With Zero Depreciation Cover?

Let us understand all the inclusions of the zero depreciation add on cover:

  1. This add on cover is offered to be availed by the policyholders generally two times during a policy year.
  2. The zero depreciation is applicable generally for new vehicles which are normally not more than five years old in age.
  3. The standard depreciation rate on a bike insurance policy lies between 0% to 40%, yet with this add on cover, you can easily claim the complete amount.
  4. With a zero depreciation policy, the policyholder is provided coverage for depreciation on your vehicle’s parts such as for all nylon, rubber, fiberglass, and plastic parts.

What All Things Are Excluded In a Two Wheeler Insurance Policy With Zero Depreciation Cover?

Let us understand all the exclusions from the zero depreciation add on cover:

  1. No compensation will be offered for total loss or damage.
  2. Tyre, tubes and batteries are covered at the rate of 50%.
  3. Losses or Damages to uninsured parts like gas kits, bi-fuel kit, or any mechanical breakdown.

Benefits of Buying a Zero Depreciation Bike Insurance Add-on Cover?

With zero-depreciation add-on cover, you can get rid of the depreciation worry to quite an extent which reduces the value of claim for your bike after an accident or a mishap. Here are the benefits to own a zero-depreciation cover:

  • Save More Money: With a zero depreciation add-on cover, the amount of premium becomes a little higher, but, in case of an accident or mishap, no depreciation will be imposed on your bike and claim amount will be calculated without depreciation that helps you get a higher compensation. The amount of compensation you earn with this cover is usually much higher than the premium paid for this add-on, which helps you save more money in the long-run.
  • Higher Compensation: The maximum amount of claim which you are entitled to receive for your bike is determined by the IDV of bike insurance policy. The compensation amount is directly influenced by the rate of depreciation applied on the parts of the bike. Therefore, with the zero depreciation bike insurance add-on cover, you can get claims without getting affected with any depreciation rate of the bike which ultimately helps you get a higher amount of your claim.
  • Peace of Mind: Bike insurance gives you a layer of protection for you and your bike against any damage, loss, injury, and so on, which brings peace of mind. Your amount of compensation gets further increased by a zero-depreciation add-on cover as it negates the rate of depreciation applicable on different parts of your bike. Hence, driving a bike knowing that any mishap will make you get the complete compensation for it will give you peace of mind for sure.

What is the Cost of A Zero Depreciation Cover? What Makes it Worth the Price?

Generally, a zero depreciation add-on cover costs almost 15% of the bike insurance premium. Though it may seem to be a high amount of price for a bike insurance add-on cover, it is certainly worth the cost of the zero depreciation add-on cover as the amount of compensation which you will receive due to this add-on cover will prove to be significantly higher than the amount of its policy premium.

Things to Keep in Mind About the Zero Depreciation Add-on Cover?

When it comes to purchasing a zero depreciation add-on cover for your bike insurance, here are a few points which you should always keep in mind:

  • This add-on cover is available only for bikes not more than two years old.
  • The zero depreciation add-on does not deduct the compulsory deductibles.
  • The zero depreciation add-on claims are allowed generally two times in a year.
  • Zero depreciation cover offers the same coverage as the bumper to bumper cover.

What are the Conditions to Avail Zero Depreciation Add-On Cover?

It is extremely important to go through the policy document carefully and comprehend conditions related to each add on cover. Generally, a zero depreciation cover can be availed under the following cases:

  • In case the two-wheeler insurance is entirely damaged or got stolen, then in such a case zero depreciation add-on cover is not applicable.
  • This add-on cover can be availed only 2 times during the whole policy duration.
  • If any loss or damage is suffered by the insured vehicle because of an accident or any other mishap, then for the repair purpose, two-wheelers should be sent to any network garage.

Note: These conditions can differ from one insurance provider to another. Therefore, at the time of buying an insurance plan with add-on cover, do enquire with the insurer to know more regarding the terms and conditions for zero depreciation cover.

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Zero Depreciation Two Wheeler Insurance FAQs

  • What is a zero depreciation cover in bike insurance?

    A zero depreciation cover for bikes is an add-on cover (extra coverage) which insures you against the depreciation charges incurred by your bike. By default, the liability for depreciation charges fall on the bike owner and thus the same is deducted from the claim amount at the time of claim settlement. However, if you opt for a zero depreciation cover, you are 100% exempt from paying the depreciation expense of your bike and all its parts except its tyres, tubes and batteries which are exempt at 50%. A zero depreciation add-on can be opted with a comprehensive bike insurance plan as well as a standalone own-damage bike insurance plan.

  • What is the best zero depreciation bike insurance in India?

    The best insurance company for a bike zero depreciation cover varies from individual to individual as per their requirements and budget. Generally, insurance companies allow up to 2 claims under a zero depreciation cover, however, there are only 3 insurance companies which allow unlimited number of claims namely IFFCO Tokio General Insurance, Royal Sundaram General Insurance and The New India Assurance.

  • Can I convert third party insurance for my bike into zero depreciation insurance?

    No, you cannot convert a third party bike insurance plan into a zero depreciation bike insurance plan. Like all other add-ons, a zero depreciation add-on can be opted with a comprehensive bike insurance plan or a standalone own-damage bike insurance plan.

  • What will I get covered in zero depreciation of bike insurance?

    A bike zero depreciation add-on covers the depreciation expense of your bike and offers compensation for repair and replacement of depreciated parts during the claim settlement process. It will cover the depreciation expense of all the parts of your bike at 100%, except tubes, tyres, & batteries, which are covered at 50%.

  • Should I buy zero depreciation bike insurance?

    Yes, you should buy a zero depreciation bike insurance cover as it insures you against the depreciation cost of your bike against a nominal additional premium amount. Also, this add-on helps you claim a higher amount by saving you from the expense of paying for the depreciation expense.

  • Is zero depreciation insurance required for bikes?

    A zero depreciation bike insurance add-on is not a mandatory requirement but is a recommended add-on. This add-on helps you get a higher claim amount and also saves you from incurring hefty depreciation expenses of your bike.

  • What is the difference between zero depreciation and comprehensive bike insurance?

    A comprehensive bike insurance is a type of bike insurance plan whereas a zero depreciation cover is a bike insurance add-on. A zero depreciation cover can be opted with comprehensive bike insurance plans and standalone own-damage bike insurance plans.

  • What is not covered by zero depreciation bike insurance?

    A zero depreciation cover for bikes does not provide coverage for 50% of depreciation charges incurred by tyres, tubes and batteries of the insured’s bike. Also, damages caused due to mechanical breakdown or to uninsured parts such as bi-fuel kit, and gas kits are excluded from the zero depreciation policy.

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