What is Bumper to Bumper Car Insurance Policy?
Bumper to Bumper Car insurance Policy, also often referred to as The Zero Depreciation Car Insurance policy, was introduced in India in 2009. As the name implies, the policy offers a comprehensive coverage leaving out the "depreciation" factor. That is under bumper to bumper plans depreciation is not subtracted from the coverage for wearing out of any body parts, except for tyres and batteries. When claimed for, the insurance company is liable to pay the entire cost, or almost the entire cost, for any damage caused due to collision or other accidents.
Under the Bumper to Bumper policy, there is 100% coverage for all fibre, rubber and metal parts without deduction of depreciation. The coverage also includes the costs for emergency transports, hotel expenses and key replacements. Zero Depreciation policy is gaining popularity among the present generation car buyers, especially those buying high-end and expensive cars.
How Worthwhile is a Zero Depreciation Car Insurance Policy?
Everything has its advantages and disadvantages and Zero Depreciation policy is no exception. The coverage of these policies is undoubtedly better than comprehensive policies. However, no good thing comes for free. Bumper to Bumper policies offer a greater coverage and hence its cost is much more than standard car insurance policies. The premiums are substantially higher, which makes it a little unreachable for people seeking affordable car insurance. However, for those who do not mind paying high premiums, this policy is desirable as it provides complete peace of mind.
These policies limit the number of claims that you can make in a year. This is done to curb customers from filing claims for small damages just because they do not have to bear the cost. Bumper to Bumper Car insurance Policies are good for brand new cars as claims are not entertained for cars which are more than 3 years old or have been driven beyond 36,000kms. Benefits are not provided in such cases. Moreover, it is also not a wise idea to shell out higher premium on old cars.
Zero Depreciation Policy Exclusions
- Damages in tyres or car batteries are generally not covered underBumper to Bumper policies unless you take an additional cover or if it is exclusively mentioned in the policy.
- It does not cover damage in the car engine due to water ingression or oil leakage unless an additional cover is taken for it.
- Mechanical breakdown of you vehicle is not covered.
- These policies do not cover the cost of consumables and oil change in car.
Advantages of bumper to bumper car insurance policy
Know why bumper to bumper insurance plan is the most preferred plan by the policyholders. Below are the benefits of bumper to bumper insurance:
100% Coverage: Get optimum claim settlement to rubber, plastic and metal parts of your vehicle without including any depreciation.
New vehicle damage risk: Policyholders are worried about the accidental risk for their brand new vehicle some plans do not cover the total vehicle. Bumper to bumper insurance plan covers 100% damage cost for your new vehicle.
Disadvantages of bumper to bumper car insurance
Premium is higher due to extensive damage coverage offered. However, the premium may increase 10-20% from normal coverage.
Restriction in a number of claims, insurer offers an only limited number of claims in a year after the limit your policy degrades to a comprehensive plan. Only, HDFC ERGO offers an unlimited number of claims to customers.
Zero depreciation plan is applicable only to new cars aged up to 5 years. Cars older than 5 years are not allowed to opt for this policy; this is the major drawback from a customer perspective.
Policy, not covers in case of engine damage due to oil leakage and normal wear and tear of tyres, clutch plates in normal course of driving.
Is premium higher?
Due to extensive coverage offered, bumper to bumper car insurance cost is 10-20% higher than normal coverage. A Higher premium is worth with complete damage coverage guarantee.
Bumper to Bumper vs Comprehensive Car Insurance:
Know the difference between bumper to bumper and comprehensive car insurance to choose the right premium plan by configuring the perils involved in both policies.
|Parameter||Comprehensive Policy||Zero Depreciation Policy|
|Max. number of claims||No Limit||Limited to 2|
|Car age limit||All cars up to 15 years old||New cars till 5 years|
|Plastic (all parts made with plastic)||50% is covered||100% covered|
|Glass – Windshield, side glass||100% covered||100% covered|
|Metal parts||1st year- 95% , 2nd year- 90%
3rd year- 85%, 4th year- 75%
5th year- 65%, up to 10 years 50% covered
|Airbags (damaged due to accident)||50% covered||100% covered|
|Burglary||Up to IDV covered||Up to IDV covered|
|Claim settlement||Current value after depreciation is covered||IDV without depreciation is covered|
|Non-deductible spare parts/ labour charges||100% covered||100% covered|
To whom comprehensive policy is suggested?
Those who are hunting for the low insurance premium and adjusted to take ample risk factor comprehensive car insurance plan is proposed. A policyholder with good driving history also considers this policy.
To whom bumper to bumper insurance is suggested?
A policyholder who required full insurance coverage for his new car and who are not adjusted to bear the risk factor involved in the policy at the time of claim settlement, best bumper to bumper car insurance plan is proposed.
Both the policies have its own perils, as a policyholder, you have to choose the right insurance plan correlates your need. To get the right one you need to possess a clear understanding of both the policies. Scrutinize the above-mentioned policies and conclude the right premium plan online.