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Purchasing a new car is responsible for insuring it against unforeseen mishaps. As per the Motor Vehicle Act of 1988, every vehicle owner must insure their cars with compulsory third-party insurance. However, this insurance policy does not cover the vehicle or the owner.
On the other hand, comprehensive car insurance covers losses and damages caused to the vehicle and third parties. Moreover, comprehensive vehicle insurance offers multiple add-ons to enhance coverage and benefits, one of which is bumper-to-bumper coverage.
Keep reading to learn more about the bumper-to-bumper coverage and its benefits!
What is Bumper-to-Bumper Coverage?
Bumper-to-bumper coverage is an add-on benefit under the comprehensive car insurance policy. It is also known as zero depreciation or nil depreciation cover. Policyholders purchase this add-on to get full coverage of their cars without any depreciation being deducted from their market value.
So, if your car is insured with bumper-to-bumper insurance, you can claim the total amount spent on replacing damaged vehicle components due to an accident.
Why Should New Car Owners Buy Bumper-to-Bumper Coverage?
Accidents are unpredictable and may occur in any vehicle, whether old or new. Buying a zero-depreciation cover offers new car owners peace of mind that they can claim the full value of their vehicle in case of severe damage.
However, this coverage comes at a price, as policyholders must pay approximately 20% more than a comprehensive car insurance policy without any add-on. A general comprehensive insurance policy covers its own damage costs after deducting the depreciation.
In bumper-to-bumper coverage, policyholders need not worry about depreciation and can enjoy full coverage of their vehicle’s price.
What are the Benefits of Bumper-to-Bumper Coverage?
Despite having a comprehensive car insurance policy, car owners may need to bear part of the expenses incurred in repairing a damaged vehicle. Buying bumper-to-bumper coverage with a comprehensive car insurance policy can save this extra expense and benefit the car owner in the following ways:
- It offers 100% coverage of the vehicle price during an insurance claim settlement.
- The claim amount under this coverage is not reduced due to the depreciation of vehicle components. So, policyholders can receive a higher claim amount.
- Individuals purchasing a luxury car for the first time can avail of this benefit to cover their new vehicle from depreciation.
What are the Exclusions Bumper-to-Bumper Coverage?
Here are some of the exclusions under the zero-depreciation cover:
- The policyholder cannot claim coverage if the damage remains uninspected before repairing the car after an accident
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- The insurance company will reject your claim if the policy expires.
- If a policyholder claims for coverage not included in its own damage section, it won’t be covered by bumper-to-bumper coverage.
- Policyholders registering a zero depreciation claim after 30 days or more from the date of the accident or damage to the vehicle are not eligible for a claim.
- You cannot claim the expenses of repairing any component or accessory of your car that is not covered by the comprehensive car insurance policy.
- A zero-depreciation policy does not cover depreciation costs for specific vehicle components like tyres, batteries, etc.
What are the Factors Affecting the Premium of a Bumper-to-Bumper Coverage?
Several factors may affect the premium amount you are paying for zero-depreciation coverage. Here are some of them:
- Model of the Vehicle
Your car’s make and model determine the price of its parts, which is a crucial factor in bumper-to-bumper coverage. If you own a luxury car, its parts will cost more. Therefore, you need to pay a higher premium to cover them, and vice versa.
- Age of the Vehicle
One crucial factor affecting the premium amount of your bumper-to-bumper coverage is the age of your car. As depreciation rates are directly related to the age of a vehicle, the zero-depreciation coverage amount also depends on it.
- Location of the Vehicle
The risk factors of on-road driving, spare parts price, etc., vary from city to city. As these factors determine a zero-depreciation cover amount, the location of your car plays a crucial role in determining the premium.
- Engine and Fuel type of your Car
The premium for your car insurance varies depending on its fuel or engine type. For instance, cars with higher cubic capacity engines must pay a higher premium than those with lower cubic capacity engines.
Bumper-to-bumper coverage is essential for new car owners seeking comprehensive protection against unexpected repair costs. With zero depreciation deductions during claims and full financial support in case of accidents or damages, this add-on offers peace of mind and financial security.
As you navigate the options for insuring your new vehicle, consider how bumper-to-bumper coverage aligns with your needs and budget. You can compare the bumper-to-bumper coverage provided by various insurance companies online before finalising one.