Updates over WhatsApp
When you buy a bike insurance policy, you must be aware of the different components that affect the premium amount. One such critical factor is the depreciation value, which is computed based on the IDV (Insured Declared Value).
In simple terms depreciation is the wear and tear of the asset over time. When you use your bike, over a period, its various parts, including engine, tyre, etc., undergoes wear and tear and their value reduces. In bike insurance, the depreciation is calculated using the IDV, which is the estimated market value of the bike based on the brand, model, and manufacturing year of the bike.
The IDV is the maximum amount that the insurance company will pay if your bike is damaged beyond repair or is stolen and cannot be traced. The higher the IDV, the higher will the insurance premium. On the other hand, the more your IDV depreciates over time, the cheaper your bike premium will be as it represents the decreased value of your bike and the insurer will have to pay a smaller amount when you raise a claim.
If you have met with a minor accident and raise a claim to replace a few parts of your two-wheeler, the insurance company will compensate as per the IDV, which will include the depreciation factor, rather than the actual replacement cost. This means you must bear the difference in the compensation provided by the insurance cost if the actual repair is higher. Depreciation in bike insurance policy is always detrimental to your finances.
Now that you know what depreciation is and how it affects the bike insurance premium, let us look at how the insurance company calculates the insured declared value of your two-wheeler.
While computing the IDV of your bike, the insurance companies generally use the following depreciation schedule.
The above table clearly shows that the older your bike gets, the higher the depreciation rate.
Riders or add-ons are additional coverage options that you can voluntarily purchase by paying an additional premium to extend the coverage of your standard policy and get additional financial protection. When you buy a bike insurance policy, you can consider several add-ons, one such useful rider is the zero-depreciation rider.
As the name suggests, a zero-depreciation add-on cover allows you to get full compensation for repairs or replacement of the damaged bike parts during the claim settlement process. So, irrespective of how old your bike is, if you need to get a part replaced, the insurer will pay the full replacement cost.
Thus, depreciation has a significant impact on the two-wheeler insurance cost. Hence, it is paramount that you maintain your bike well so that it retains its value over time and the premium remains affordable. If you are looking for the best bike insurance policy at an affordable premium and extensive benefits, you can consider buying the Kotak Long Term Two Wheeler Secure bike insurance from Kotak General Insurance. Visit our website to know more about the policy.
I/we give my/our consent to receive information in respect of policy servicing, claim servicing, updates on my policy, updates on new and existing product, marketing or servicing my relationship with Kotak Mahindra General Insurance Company Limited, its group companies/associates or agents through Telephone/Mobile/SMS/e-Mail, etc. Further, i/we understand that my/our consent to receive calls/communications shall be valid and shall prevail over my/our current or any subsequent registration of my/our number for the NDNC and shall continue to be treated as my/our consent/acceptance. (If you do not wish to accord your consent, please submit a Do Not Call (DNC) form alongwith this form.
I/we have understood the form, including the clause on consent to call, and i/we have agreed the same after understanding and accepting the terms contained therein.
Benefits of car insurance
A car insurance can help you offset substantial financial loss that you may incur because of damage caused to your car
Must have Add On Covers for Car Insurance
A basic comprehensive car insurance covers damage to car, 3rd party liability and theft & loss of vehicle.
Right time to buy vehicle insurance
Buying a vehicle insurance is an important decision and you need to ensure that you make a timely purchase of vehicle insurance
Know How Car Insurance Premium Is Calculated
Car insurance premium calculation is based on various important factors. Learn about these factors.
Rules to follow for safe driving
Know About The Important Road Safety Rules To Follow
Significance of a motor vehicle insurance policy
Apart from financial security, know in what all ways a motor insurance policy is significant.
Maintenance tips for car engine
Follow these maintenance tips and buy a car insurance with engine protection cover to keep engine secure.
Monsoon Tips for Car
Simple tips to help you stay safe and keep your car moving ahead during monsoon.
What is Zero Depreciation Cover
Read on to understand what is zero depreciation car insurance cover and how it works.
Questions Regarding Motor Insurance Policies
Essential questions answered about motor insurance policies in India.
To optimise our site experience on your handheld device, please hold your phone vertically.