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Bumper to Bumper Insurance: A Complete Guide

Bumper to bumper insurance plays an important role in ensuring extensive insurance protection. Having insured your car with a comprehensive cover is a good idea. But, what if your existing cover proves to be insufficient at times? Though the agent in his/her insurance pitch says that everything that needed to be insured is covered by this policy, it’s not 100% true. Regular wear and tear is not covered by a standard car insurance policy. Hence, you’re never compensated fully for the damages sustained by your vehicle. Here comes bumper to bumper car insurance add-on into the picture.

What’s Bumper to Bumper Insurance?

Bumper to bumper, nil depreciation or zero depreciation is the type of car insurance policy that offers complete coverage to your vehicle irrespective of the depreciation of its parts. So, in the case when there is a loss or damage caused to your vehicle after an accident, the insurer will not deduct the depreciation value from the coverage (excluding car batteries and tires). And the best part is that your motor insurer will pay the entire cost of the replacement of the vehicle’s body parts.

Bumper to bumper car insurance or nil depreciation provides full coverage for all rubber, fiber, and metal parts of your car without deducting the depreciation. Remember that it will not cover engine damage resulting due to oil leakage or water ingression. The list of exclusion also includes mechanical breakdown, consumables or oil change. Also, there are also limitations on the number of claims that you can file in a year.

How Worthwhile is a Zero Depreciation Car Insurance Policy?

Clearly, the zero depreciation cover has its advantages over a basic comprehensive car insurance policy. But there are no free lunches, right. Every good thing has a cost attached to it. To start with, a car insurance policy with zero depreciation rider benefit will cost nearly 20 percent more than a no-frills car comprehensive policy.

It means that you are already paying a higher premium to make sure that you don’t have to chip in during your car insurance claim settlement in the future. Simply put, you are paying in advance towards those future costs. Those who are seeking an affordable policy, this could be a deal breaker. But at the same time, it will lure customers who are willing to pay the higher premium rates to ensure their peace of mind.

This add-on feature is most suitable for people with luxury cars, new cars, car models with expensive spare parts, or people residing/driving in accident-prone areas.

Zero Depreciation Policy Inclusions and Exclusions

Let’s check out what’s included and excluded from a zero depreciation/nil deprecation/bumper to bumper  add-on cover:

  • Zero depreciation cover includes fiberglass components, rubber parts, plastic, and nylon parts
  • It can be availed at the time of policy purchase and renewal
  • In a bumper to bumper policy, you can claim the full amount. Whereas in a standard policy depreciation rates between 0% and 40% are applicable
  • The nil depreciation rider is beneficial for new cars or with a maximum age limit of 3 years. The number of claims is limited, which may vary from one insurer to another
  • A zero depreciation policy does not cover normal wear and tear or an uninsured peril is not covered
  • Damages caused due to uninsured items such as tires, bi-fuel kit, and gas kits and mechanical breakdown are excluded from a zero dep. policy
  • It is essential to renew the zero depreciation policy every year to continue enjoying the policy benefits.

Advantages of Bumper To Bumper Car Insurance Policy

Having nil depreciation or zero depreciation cover in your car insurance policy would mean full compensation for your loss/damage at the time of claim settlement. The amount is certainly more than the amount reimbursed under a comprehensive car policy. Because the claim amount in a comprehensive car insurance policy will be paid on the basis of the current market valuation of the car after adjusted the value of depreciation. And there will be a certain cost that the car owner would need to pay from his/her own pocket towards the repairs. Whereas, in a zero depreciation policy, you will get the entire claim amount.

For instance: If your car (hatchback) was damaged and the cost repair was INR 40,000, then you might have to pay anywhere between INR 20,000 to INR 25,000 from your own pocket, for any depreciation of metal/plastic parts. Whereas, this is not a case in a zero depreciation policy.

If you are lucky, there are some insurance companies that offer coverage for roadside assistance, emergency transportation, towing assistance, key replacements, regular maintenance, and likewise.

Disadvantages of Bumper To Bumper Car Insurance

A zero-depreciation policy is priced at least 20 to 30 percent higher than a basic comprehensive car insurance policy.

There is a limitation on the number of claims that you can file during a policy term to get the full claim benefits

Bumper to Bumper Vs. Comprehensive Car Insurance

Here is a brief comparison between a comprehensive car insurance policy and a policy with zero depreciation rider benefit:

Zero-Depreciation Cover

Comprehensive Cover

This is an add-on benefit, for which you will need to pay an extra premium.

The premium amount is lower than a bumper-to-bumper policy

Compensation is provided for the full cost of repairs for external car body damages regardless of the depreciation value

The compensation amount excludes the depreciation value of the parts

The insurance company pays for the replacement/repairs/ replacement of the fiber and plastic components of your car.

You make the partial payment for the replacement/repair of the plastic, metal, or fiberglass components of your car

Car Depreciation and Its Impact

Car Depreciation comes into play at the time of renewal or claiming your policy. But before we delve into that, let’s know what is depreciation and how does it influence your car insurance claim:

Every vehicle tends to reduce its value with time. Even when it is out from the showroom, the value gets down up to a certain percentage. Moreover, due to the regular wear and tear all over the parts leads to depreciation. Depreciation plays an important role at the time of deciding the car insurance premium. In order to decide the premium, the insurer needs to arrive at the actual value of the car. By considering the rate of depreciation, the insurer calculated the IDV, up to which an insured is compensated.

Rate of Depreciation

The Indian Motor Tariff has a fixed rate of depreciation to be applied in car parts and accessories considering which the insurers decide the IDV or settles a claim under comprehensive insurance. The rates are as given below:

Parts

Depreciation

Parts that are prone to high wear and tear including plastic parts, rubber/nylon parts, batteries, tyre and tubes etc.

50%

Paintwork

50%

Parts made of glass or fibreglass

30%

Metallic car parts

0-5%

So, in case of a claim, the insurance provider only up to the IDV after applying the depreciation rate to the damage caused to a particular car part. No doubt, there is a difference in the actual market value of the new parts and the depreciated parts. Hypothetically, this deference is borne by the insured at the time of claim.

Solution to this- The Bumper to Bumper Insurance

If you don’t want to pay those extra for replacing a depreciated car part and to ensure the full value while claiming your car insurance, consider adding Zero Depreciation cover into your financial planning.

Bumper to Bumper Cover is Recommended For!

This cover is beneficial for:

  • Those who own expensive cars or brand new cars
  • Inexperienced drivers or people without a good driving record
  • It the vehicle is registered or being driving in an accident-prone area

Why is Bumper to Bumper Cover in Vogue?

Here’s why Bumper to Bumper insurance is one of the most sought-after insurance products in India, which you can consider along with the basic cover:

  • It makes the claim process easier for someone who claims for the first time by covering the expenses incurred towards the repair or replacing the depreciated parts listed above.
  • This cover is a boon for the owners who have expensive cars that demand high maintenance. Usually, repair or replacement of any parts of these cars come at a cost. Having this add-on relieves the policyholder by paying the full value during a time of the mishap.

The Consequences of Not Having It!

In the event of an accident or total loss like theft, the only thing that comes to your mind is to claim your car insurance policy. You will be a relief thinking that the insurer will compensate up to a justified limit. But at the end, you come to know there is a huge portion of the claim due on you. Why?

  • Because your basic policy is not aligned with the right add-on and it only covers you up to a certain limit. Hence, you’re deprived of getting the full value of the car.
  • The difference between the current market value of the new car parts and the depreciated value of these parts will be paid by you only. The insurer will cover the rest of the amount only.
  • The depreciation amount can sum to a major part of your sum insured
  • The amount corresponding to the depreciation can amount to a major part of your insured amount.

Hence, consider zero depreciation cover and stay protected!

Does Bumper to Bumper Insurance Actually Cover Everything?

Even Bumper to Bumper insurance is not free of limitations. The policy becomes null and void under certain circumstances such as:

  • This cover is useless for cars that are more than 5 years
  • It doesn’t provide coverage to engine damage due to oil leakage or water ingression
  • Regular wear and tear, damage to tyre and tubes, clutch plates, bearings etc.
  • If the private car is being used for a commercial purpose or vice versa
  • If the vehicle owner is not carrying valid car insurance at the time of the accident
  • No coverage if offered if found the driver guilty of driving under the influence of alcohol or drugs or other intoxicating substances
  • If the driver is not carrying a valid driving license
  • If the vehicle is used for legal activities
  • Only a limited claim is permitted, usually, the count is 2. However, depends on the insurer
  • If a particular claim is not registered within the stipulated timeframe of claim registration
  • The insurer has to bear the considerable deductibles as well as per the insurance agreement

Deciding Bumper to Bumper Insurance Cost

Bumper to bumper insurance cost is decided at the time of purchasing a policy. The insurer decides the cost of zero depreciation by considering the below factors:

  • Age of the vehicle
  • The model and make of the vehicle
  • The location of the vehicle owner

However, one can check the premium by using bumper to bumper car insurance calculator.

How to Buy Bumper to Bumper Car Insurance Online?

Bumper to bumper insurance coverage can be bought online. The process is a similar as buying a comprehensive insurance cover. The only difference is you can add this cover at the time of renewal if you have not bought it together with the basic policy. Compare the policies available online first. If you find the suitable option, pay the premium online using your credit or debit cards or through net banking. The transaction is secured through an online payment gateway, which keeps your details confidential.

Top Insurers Offering Bumper to Bumper Insurance

In order to get the right type of insurance, you must excel the ability to select the right insurer first. With plenty of insurance, it might be confusing the land on the right one. By saying that, here’s a list of top insurance providers that offers comprehensive coverage with add-on option such as nil depreciation cover:

  • TATA AIG General Insurance Company
  • HDFC ERGO
  • Bajaj Allianz General Insurance Company
  • Bharti AXA General Insurance Company
  • New Indian Assurance Company Ltd.
  • National Insurance Company
  • Reliance General Insurance Company
  • United India Insurance Company
  • Oriental Insurance Company Ltd.

Wrapping it Up!

Standard car insurance may not suffice your requirement, over the period. As requirement tends to change, the plan with the same benefits that met your insurance needs initially may not suffice you today. Moreover, your car is vulnerable to mishaps and you can’t help it. You only can provide protection. And by buying Bumper to Bumper insurance, you can ensure optimum protection to it!

Bumper to Bumper Insurance FAQs

Q.1. Does bumper to bumper insurance India cover wear and tear of car tyre and tubes?

Ans. No, the policy doesn’t cover wear and tear of car tyre or tube. You may find another add-on to cover the same.

Q.2. What is the procedure of initiate bumper insurance claim?

Ans. The process of claiming Zero Depreciation cover or bumper to bumper cover is the same as a comprehensive cover. The only thing to be considered is, while deciding the IDV make sure that the insurer doesn’t add the depreciation cost, as you’re liable to get the full market value of the car. The common steps to claim this policy are:

  • Inform the insurer as soon as possible and register the claim
  • Send the vehicle for damage estimation. Make sure you are getting the full compensation for the same
  • Get repaired the car at a network garage, where the expenses will be settled directly
  • Sign and submit the customer satisfaction voucher and get home the car.

Q.3. Are comprehensive insurance and bumper to bumper insure same?

Ans. No, they are not. Comprehensive insurance is the basic cover where zero depreciation is an add-on cover. You can take up a bumper to bumper policy without taking a basic cover.

Q.4. How much does it cost to replace the bumper of a car?

Ans. A replacement of bumper averages Rs. 10,000. If any lights, cameras, sensors, or other components are also damaged, the cost will further increase. Moreover, the price may differ from car to car. It also depends on the model, colour and the extent of the damage.

Q.5. Does bumper to bumper is worth claiming for scratches?

Ans. As you are told that, the policy can be claimed for a limited number, the motive of the insurers to keep you away from claiming the insurance from small damages such as scratches. By sparing those small claims, you can earn the benefit of not claiming the insurance as well as keep the policy safe for major damages.

Q.6. Should I buy a bumper to bumper warranty for used cars?

Ans. Bumper to bumper or nil depreciation cover is usually recommended for new cars or the expensive cars that demand higher maintenance. However, you can buy a cover if your car is not more than 5 years old. Else, there is no point buying this cover as it only will raise your car premium.