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 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 tires 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% complete coverage for all fiber, 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.
Bumper to Bumper insurance meaning in Car is a comprehensive insurance policy that provides 100% coverage of damages to the fiber, metal, and rubber parts of your car. This insurance policy is ideal for car owners who have a new car, who own luxury cars, who drive their cars in accident-prone areas, and New or inexperienced drivers.
How Worthwhile is a Bumper Depreciation Car Insurance Policy?
Everything has its advantages and disadvantages and the 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 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. Car insurance Bumper to Bumper Policies is good for brand new cars as claims are not entertained for cars that 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 a higher premium on old cars.
Bumper to Bumper Insurance for a Used(Second-Hand) Car:
Bumper to Bumper insurance can also be useful for those who own an old car or a used car. For this, they have to purchase an add-on called Zero Depreciation with their Bumper to Bumper Car Insurance. With the regular passage of time, a car undergoes wear and tear. The value of a car progressively reduces with the passage of time. Even if a car is kept simply in the showroom without being sold, its value is likely to decrease with the passage of time. This reduction in the value of a car is referred to as depreciation.
A usual car insurance policy does not cover the wear and tear of a car or the usual depreciation that the car is likely to suffer from the passage of time. So, if a car undergoes any damage and if it has insurance coverage, the insurance company always deducts a certain amount as wear and tear costs before settling the insurance claims. With the Zero-Depreciation cover, the insurance company will pay for the entire expenditure incurred while replacing any damaged part of the car. Since those who own a used car are likely to have incurred more wear and tear damages, it is highly recommended for them to buy a Zero Depreciation add-on to ensure that they do not have to pay any money from their pocket if their car meets with an accident.
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% of the 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 the number of claims, the insurer offers only a 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.
- A 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 cover in case of engine damage due to oil leakage and normal wear and tear of tires, clutch plates in the 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 it with a complete damage coverage guarantee.
What is Covered in Bumper to Bumper (Zero or Nil Depreciation) Insurance?
While the bumper to bumper insurance covers every inch of your car in case of damages due to an accident, it does not cover some aspects of the claim. Here are the details:
- Parts such as rubber, plastic, nylon parts and batteries are not covered. A minimum of 50% depreciation is calculated before the insurance company settles the claim.
- Fibreglass parts of cars will be depreciated by 30% and do not enjoy the complete coverage, unlike metal parts.
- Wooden parts will receive a 5% depreciation in the first year and 10% in the second year, and so on.
Bumper to Bumper Car Insurance Policy Exclusions:
- If the age of your vehicle is 5 years or more, it will not be eligible for the cover
- If any illegal or unethical involvement of the vehicle is reported, the insurance company will not process the claim made
- Commercial use of a private vehicle
- Certain engine damage, battery/tyre/ clutch plates/ bearings damage
- If the driver was under drugs or alcohol influence during car damage
- If the papers of the vehicle are incomplete
- If the claim is not done as per the timeframe of the policy
- Damage due to uninsured peril
- Damage due to mechanical breakdown
- Damage to items like accessories, gas kit and tires
Bumper To Bumper vs Comprehensive Car Insurance:
Know the difference between comprehensive car insurance and zero depreciation insurance to choose the right premium plan by configuring the perils involved in both policies.
||Zero Depreciation Policy
|Max. number of claims
||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
|Glass – Windshield, side glass
||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)
||Up to IDV covered
||Up to IDV covered
||Current value after depreciation is covered
||IDV without depreciation is covered
|Non-deductible spare parts/ labour charges
Know More about Bumper to Bumper Car Insurance
Car insurance consists of two sections namely third party and own damage which when offered together is known as a Comprehensive car insurance policy. The own damage section under the car insurance has add-ons that can be opted on payment of additional premium. The premium to be paid for these add-ons varies from company to company and also depends on the age of the car.
1. Bumper to Bumper in Car Insurance:
Bumper to bumper in car insurance is the add-on available on payment of extra premium under the own damage section. It is also known as “Nil depreciation” or “Zero depreciation” cover but the most used market terminology is bumper to bumper insurance. Having bumper to bumper car insurance enables the customer to get the complete claim amount in case of an accident without factoring in the depreciation of the parts.
We know that the value of each part depreciates over time and the same is applicable in the case of cars also. In case of an accident, the depreciation of the part damaged is taken into consideration and the amount is removed from the final claim bill. If the customer doesn’t opt for bumper to bumper car insurance, then the depreciated amount has to be borne by him/her, and the remaining claim amount will be paid by the insurance company.
2. Price for bumper to bumper Add-on:
The price for the bumper to bumper add-on is different for different insurance companies and is in general a certain percentage of the Insured Declared Value of the car. Price for the Insured Declared Value may increase each year due to the increase in depreciation of the parts with each passing day.
Bumper to bumper or Zero Depreciation or Nil depreciation price is included in the own damage section of the car insurance and the price differs for each make and model of the car. For example, the Bumper to bumper car insurance price of a Maruti Baleno might be less than that of the Hyundai I20; this is due to the cost of replacement of the part at the time of the accident.
Bumper to Bumper Car Insurance Cost:
The bumper to bumper car insurance cost or premium is slightly higher compared to regular car insurance. This is because it covers all parts of your vehicle and does not depreciate the value of the parts being replaced while calculating the claim amount. You enjoy complete coverage and the insurer pays 100% towards the claim raised. That said, the cost is marginal compared to the money that you may have to pay from your pocket under the comprehensive insurance plan in case of repairs.
3. Bumper to bumper for Cars Aged above 5 years:
Most of the general insurance companies in India offer the bumper to bumper car insurance add-on only up to the age of 5 years. This is due to the calculation that the IDV depreciates to 50% of the ex-showroom value till the age of 5 years and bumper to bumper car insurance after 5 years of age the IDV is mutually agreed between the insured and the insurance company.
Hence, bumper to bumper car insurance renewal tips is most of the general insurance companies do not offer bumper to bumper insurance after 5 years of age for the car. Some companies such as TATA AIG, IFFCO TOKIO offer the bumper to bumper add-on till 7years of vehicle age. The 4 wheeler bumper to bumper car insurance calculator premiums for AUDI A4 insurance starts from Rs.7,890 for only third party insurance and goes up to Rs.1.5 Lacs for the comprehensive insurance cover including the add-ons such as bumper to bumper and engine protection.
4. Need for bumper to bumper:
Bumper to bumper coverage is often described as the complete insurance coverage to the car by most insurance specialists. This is due to the reason that the depreciation cost is also included by the insurance company at the time of claim settlement. If you are paying insurance without opting for bumper to bumper cover, in case of a claim the full claim amount is not payable and there would be no meaning in taking insurance without getting the full claim.
So the bumper to bumper car insurance is the most talked about product in the insurance market with the majority of the customers opting for bumper to bumper for the new car. To prevent yourself from paying a part of the claim amount, it is advisable to include bumper to bumper coverage in your car insurance at the time of purchase.
One important thing to note is that the bumper to bumper car insurance is valid and works only if the repairs are carried out at the recognized garage of the insurance company. This means that the repair carried out at the cashless garage/tie-up garage of the insurance company is eligible for the claim to be settled under bumper to bumper cover.
For best bumper to bumper car insurance coverage quotes visit www.policybachat.com and get the bumper to bumper coverage up to 7 years for your car from the top general insurance companies.
Factors to Consider Before Buying a Bumper to Bumper Insurance:
Before you buy standard car insurance or the bumper to bumper cover, you need to consider several factors to make an informed choice. Below are the main factors that you need to consider before you opt for the bumper to bumper insurance:
Not Available for All Cars: There is a limitation to the age of the vehicle. Insurers do not offer bumper to bumper cover for cars after a certain age.
Limitations of Claims per year: Some insurance companies limit the number of claims you can raise during the policy period. This is to discourage policyholders from raising small claims for every dent.
Cost of the Add-on Cover: The premium is slightly higher for the bumper to bumper car insurance compared to the basic Comprehensive car insurance policy. While this may sound expensive, your finances are well protected in case of damages to your car in case of an unfortunate accident.
How to Buy Bumper to Bumper Car Insurance Online?
How to check bumper to bumper insurance online? You can buy car insurance with bumper to bumper add-on online through the insurer’s website or mobile app. The steps to buy are similar to that of the Comprehensive car insurance policy. If you have standard car insurance, you can choose the add-on while renewing the policy. However, you can also choose the add-on at the time of purchasing the vehicle. Below are the steps to buy bumper to bumper car insurance online:
- Step 1: Visit the policybachat website.
- Step 2: Enter your vehicle registration number to renew the policy. You can also use the same steps in case you want to change the insurance provider.
- Step 3: You will be prompted to select different types of Add-on covers. Choose the Zero or Nil Depreciation Cover as an add-on.
- Step 4: Pay the required premium and get your policy document instantly to your registered email address.
How to Renew Bumper to Bumper (Zero or Nil Depreciation) Car Insurance Online?
The bumper to bumper car insurance renewal is simple, especially if you are doing it online. It is similar to renewing your standard car insurance policy. Below are the steps to renew bumper to bumper car insurance online:
- Step 1: Visit the insurance provider’s website.
- Step 2: Sign in with your credentials or if you are changing the insurance company, then enter the registration number of the vehicle.
- Step 3: Select the add-on before you pay the premium.
- Step 4: Pay the premium and receive your bumper to bumper car insurance policy to your registered email address.
To whom Comprehensive Policy is suggested?
For those who are hunting for a low insurance premium and adjusted to take ample risk factors comprehensive car insurance plan is proposed. A policyholder with good driving history also considers this policy.
To whom Bumper To Bumper Car insurance is suggested?
For a policyholder who required full insurance coverage for his new car and who is not adjusted to bear the risk factor involved in the policy at the time of claim settlement, the best bumper to bumper car insurance plan is proposed.
Both the policies have their own perils, as a policyholder, you have to choose the right insurance plan that correlates with your need. To get the right one you need to possess a clear understanding of both policies. Scrutinize the above-mentioned policies and conclude the right premium plan online.