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 Comprehensive car insurance policy. The own damage section under the car insurance has add-ons which 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 the depreciation of the parts.
We know that the value of each part depreciates over time and the same is applicable in case of car 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 accident.
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 the calculation that the IDV depreciates to 50% of the ex-showroom value till the age of 5 years and after 5 years of age the IDV is mutually agreed between the insured and the insurance company.
Hence, car insurance renewal tips are most of the general insurance companies do not offer bumper to bumper add-on after completing 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 car insurance premium 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 of the 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 product in the insurance market with majority of the customers opting for bumper to bumper for the new car. To prevent yourself from paying a part of 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 recognised 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.
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