Buying car insurance is not just complying with the legal obligation, but it is about selecting the right coverage for your car. In order to abide by the law, third party insurance would suffice, but this insurance only covers damages done to the third party vehicle and not to your own vehicle.
Suppose your car bumps into another vehicle at the parking lot, and both the vehicles suffer damages, the third party insurance would cover all the damages done to the other vehicle, but you will have to bear all the damages suffered by your car. Having a comprehensive policy or own damage insurance would have helped in such a situation.
But there are times when even your comprehensive car insurance policy doesn't cover the complete damage amount, and you would have to select add-ons for the coverage; in such cases, a bumper to bumper car insurance helps.
What is bumper-to-bumper car insurance?
As the name suggests, it covers the complete cost of damages from one end to the other end of the car. It includes any damage to any part of the car, whether rubber parts, plastic, fibreglass, nylon or any other metal component. Exclusions are for tyres, batteries, glass and a specific type of engine damage.
This insurance policy started in India in the year 2009 and is fit for those who own a luxury car or have recently purchased a new car. Car owners who are inexperienced or frequently drive in accident-prone areas can also buy bumper to bumper car insurance.
How is bumper-to-bumper insurance different?
One of the most frequent queries is how this insurance differs from comprehensive car insurance. The answer is this insurance doesn't take into account the depreciation of the car or its parts, and with minimal exclusions, bumper to bumper car insurance covers almost 100% of the damage. This is also the reason why bumper-to bumper insurance is known as Zero depreciation cover.
Although this insurance majorly covers the damages, there are certain limitations to this zero depreciation insurance cover. They are:
• Car age: This policy can be purchased for only cars that are five years old or younger
• Limited number of claims: The number of claims for this type of insurance is limited and varies from insurer to insurer. You can also check with your insurer regarding the number of claims that they offer before making a purchase.
• High premium: As a rule, when protection and coverage are more, the premium would be high. The same is the case with bumper to bumper insurance. This insurance premium amount is much higher as compared to comprehensive car insurance.
The bumper to bumper car insurance may have its own perks, but there are situations where the claim is denied. A few factors of refusing claim settlement are:
• Hiding any information while raising a claim
• If the car is found to be involved in some unethical activity
• When the car is driven under the influence of drug or alcohol
• If the documentation process is incomplete
• If policy is expired
• If the damage is due to any peril other than that mentioned in the policy documents
• If the owner fails to make a claim within the stipulated time period
Thereby, it is necessary to read the terms and conditions minutely before signing the document to avoid any claim refusal later.
While having a bumper to bumper insurance can help to recover the damage cost majorly, the high premiums may not be affordable for all. In such situations, the key is to purchase comprehensive car insurance with add-on covers. You can also talk to our Kotak General Insurance experts, who will guide you better regarding the vehicle insurance online/offline policies and benefits.
Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.