Zero depreciation insurance policy, also known as zero dep policy or bumper-to-bumper policy, is a type of motor insurance that provides complete coverage for the car or bike without accounting for depreciation. Essentially, in the event of an accident, the insurer will not subtract the depreciation value of the parts from the claim amount. This means that the policyholder will be able to claim the full cost of repair or replacement of damaged parts.
The zero depreciation insurance policy covers the cost of plastic, fiber, and rubber parts, as well as metal parts like the engine and gearbox. It's important to note that zero depreciation policy does not cover the cost of consumable items like engine oil, brake fluid, etc.
While zero depreciation insurance policy tends to be more expensive than a regular motor insurance policy, it can help car or bike owner save a lot of money in the long run. This is because, at the time of an accident, the insurance company will only pay for the depreciated value of the damaged parts with a basic policy, which means that the policyholder will have to pay for the remaining amount out of pocket. With zero depreciation policy, all costs are covered that helps to lower the financial burden on the policyholder.
In summary, zero depreciation insurance policy provides comprehensive coverage for a car or bike without accounting for the depreciation of parts. It is a great option for those who want to maximize their coverage and minimize their out-of-pocket expenses in the event of an accident.