The chances are high that you would have come across the terms Bumper to Bumper car insurance. But what exactly does it mean and what does it cover is a question that not many know the answers to. Let’s find out more about a bumper to bumper car insurance.
Bumper to bumper car insurance is also known as a Nil depreciation or Zero depreciation insurance. This policy leaves out depreciation on your vehicle, thereby ensuring a complete cover for your insurance policy. In a standard car insurance policy, when you claim, depreciation of the parts is taken into consideration. And you end up paying the additional amount after depreciation has been factored in.
In a bumper to bumper insurance, insurers do not deduct any form of depreciation from the claims. This is applicable to the entire car, excluding the batteries and tyres. It is the responsibility of the insurance company to bear the entire cost of parts or repairs.
A bumper to bumper policy offers coverage on metal parts, fibre parts and rubber parts. However, it does not offer coverage for engines, if there is a leakage of oil or ingress of water. The policy also doesn’t take into consideration mechanical breakdowns, consumables or oil changes.
The following people can benefit the most from buying a bumper to bumper car insurance.
- A person who has bought a brand new car.
- A person who is new to driving or has minimal experience.
- Cars that are high end in nature and have expensive spare parts.
- Individuals who live in areas that are more prone to accidents.
A Standard Car Insurance Policy
Should you opt for third party insurance, bumper to bumper cover doesn’t come into the picture, since the main policy doesn’t cover own damage. In order to benefit from a bumper to bumper cover, you need to opt for a comprehensive policy. According to the IRDAI, the following depreciation must be deducted during repairs.
- 50% depreciation on rubber parts, batteries, plastic or nylon parts.
- 30% depreciation on fibre based glass parts.
- Standard car depreciation on wooden parts. (5% for the first year, 10% for the second year and so on).
The Solution Instead of opting for third party insurance only, it is recommended to opt for a comprehensive car insurance policy. Now for the issue mentioned above, i.e. depreciation of different parts of the car, bumper to bumper add-on is the ideal solution. It is more commonly known as the zero depreciation cover. Should you opt for this, the plan instantly eliminates any depreciation value on the parts mentioned above.
Take for an example, your hatchback goes to the garage for a repair post an accident. And if the workshop provides you with a bill of INR 35,000, you will end up paying as much as INR 15,000-INR 20,000 due to depreciation in spite of having an insurance cover. Having a zero depreciation add-on will ensure that you need not pay a such huge sum of money from your pockets.
There are a few insurers who also offer roadside assistance, towing services, emergency transportation key replacements and so on along with the plan. And there is a good reason why the zero depreciation cover policy is one of the most bought add-ons for a Car insurance policy. New car owners and owners who do not have a lot of experience under their belt, would prefer for complete coverage. This cover benefits high-end cars as well.
Before you set out to buy your policy or add-on, a car insurance calculator is what you should take a quick look at. The car insurance calculator expects certain basic information from you, such as the vehicle details, previous policy details, your area of residence etc. Once you provide all these, it would offer quotes accordingly. You can then opt for add-ons and see how that impacts the premium and take a final call.
Buying a bumper to bumper insurance will offer peace of mind when it’s a high end car, first car or for people with relatively lower driving experience.
Also published on Medium.