Over time, the value of your vehicle reduces. This gradual reduction in the value is called depreciation of your vehicle. To help bear the depreciation cost, insurance providers are directed by IRDAI to pay the partial amount for repair costs or replacement costs of any part of the vehicle. The remaining amount of depreciation has to be borne by you personally. Rubber, nylon, plastic, tube, tyres, fibres, etc., are some of the depreciable parts of the bike covered under your insurance policy. Following is a table listing the percentage of depreciation cost covered by the insurance providers for the various parts:
| Depreciable part of the bike | Deduction percentage |
| Rubber, nylon and plastic parts | 50% |
| Fibre-glass parts | 30% |
| Tubes and tyres of the bike | 50% |
| Glass components | 0% |
The remaining percentage of the depreciation costs are to be borne by you personally. Moreover, the depreciation rate depends on the age of the bike part. For instance, your depreciation rate will be NIL if your bike is not older than 6 months. The rate will be 5% if your bike’s age is between 6 months to a year. The maximum depreciation rate is 50% and that is for a bike aged more than 10 years. This way, the depreciation rate ranges from 0% to 50% basis the age of the bike.
However, you will not be asked to pay any depreciation amount if you have a zero-depreciation add-on cover. As per this cover, the entire amount will be borne by the insurance provided. Following is a table that shows the difference between a simple, comprehensive insurance policy and a policy with zero depreciation cover.
| Differentiating Points | Zero Depreciation Add-On Cover | Comprehensive Bike Insurance Policy |
| Claim Amount | The deduction will be according to the depreciation value. | Full payment of garage bills. |
| Premium Amount | It is 15-20% higher than the comprehensive insurance policy amount as it provides full coverage. | It is comparatively lower than the zero-depreciation cover. |
| Cost of Depreciable Parts | It is fully covered under this add-on cover. | It is not fully covered, and the insurance provider will pay only a certain amount. |
| Claim Settlement Process | The insurer does the complete payout. | The depreciation deduction is in percentage for the various bike parts. |
| Bike Age Suitability | Up to 2 years of age | Up to 15 years of age |
The best way to cover your bike repair cost and save a good amount of money in case of an unfortunate accident that involves your bike is by going for a comprehensive bike insurance policy along with a zero-depreciation add-on cover. This is because, whether the parts are fibre, metal, iron, or aluminium, they all will be covered under your bike insurance policy, and you will not have to pay for any damage from your pocket.
Therefore, ensure to always opt for the policy that serves your purpose the best and provides the highest financial assistance. Chola MS two-wheeler insurance offers umbrella protection for your dream rides along with the option of multiple add-on covers. Click the link now to know more!
