Bike Insurance Add-ons: Zero Depreciation Cover V/s Return to Invoice Cover

Among all the bike insurance add-ons available in the market, zero depreciation and return to invoice cover are commonly purchased covers, which helps reduce out-of-pocket expenses. However, people might get confused while buying these covers, as new bike owners who have recently purchased a new bike usually prefer them both. If you also want to know the difference between these two, read on!

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Zero Depreciation Cover in Bike Insurance

You must be aware of the term 'depreciation' whenever you buy a motor vehicle. In two-wheelers, depreciation means the wear & tear of bike’s parts over time. As the value of the bike depreciates, it has a direct impact on the claims.

So, what is this "Zero Depreciation Cover" all about? Well, it is a value-for-money add-on cover that makes your bike feel brand new again without burning a hole in your pocket. It is also known as "bumper-to-bumper insurance" because it covers the depreciation of your bike's parts, ensuring you do not have to pay the bill for regular wear and tear of the bike's parts.

Here are the key takeaways about Zero Depreciation cover:

  • This add-on cover is available for bikes under 5 years old.
  • Before your claim is settled, deductibles (both mandatory and voluntary) will be deducted.
  • You have to pay an additional premium to buy Zero Depreciation add-on cover.

Return to Invoice (RTI) Cover in Bike Insurance

Your two-wheeler insurance premium depends on the approximate market value of the bike, commonly known as Insured Declared Value (IDV) in the insurance industry. If your bike is damaged beyond repair in an accident or is stolen, then you will receive declared IDV of your motorcycle after considering the depreciation factor and deductibles.

However, if you own a 'Return to Invoice' cover, you will receive the amount that you spent while purchasing the bike in the first place. In simpler terms, it bridges the gap between the IDV and the bike's purchase value (including registration charges and road tax). Hence, you will get the maximum compensatory amount, not the IDV, in case of total loss or theft of the insured bike.

Here are the key pointers about the Return to Invoice cover:

  • It is applicable when the repair cost (as per policy terms) is more than 75% of the IDV.
  • This add-on cover kicks in when your bike is stolen or is declared a total loss.
  • It is a lifesaver for those living in high-accident zones or areas with a vulnerability for bike theft.
  • Like Zero Depreciation cover, you will need to pay an extra premium to enjoy the benefits of RTI cover.

Zero Depreciation vs. Return to Invoice Cover in Bike Insurance

Both of these add-on covers aim to lessen the financial burden. However, they have their unique specifications. Check out the differences in the table below:

Points of Basis Zero Depreciation Cover Return to Invoice Cover
Meaning This add-on eliminates the impact of depreciation on the value of the bike's parts during repair or replacement. This add-on helps you receive the purchase/invoice value of the insured bike if it is damaged beyond repairs or is stolen.
How it Works? With this cover, you get the full cost of repairing or replacing parts, reducing your out-of-pocket expenses. In the event of theft or total loss, you receive the original invoice value of the bike, not just the depreciated IDV.
Example Mr. X's bike was damaged in an accident and went for repairs. Since he had zero dep covers, the insurer settled the bill without considering the depreciation of the bike's part. Mr. X's was stolen, and the police could not find it. Since he already has an RTI cover, he got the invoice value of the bike instead of the declared IDV.

You may also read Return-to-Invoice Cover in Bike Insurance

Final words!

Both add-ons have always played a crucial role in enhancing policy coverage since they cover the losses that the base policy ignores. However, if you plan to buy these covers, ensure that you choose as per your requirements.

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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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^The buying of Insurance policy is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. Actual time for transaction may vary subject to additional data requirements and operational processes.

#Savings are based on the comparison between highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI-approved insurance plan. Standard T&C apply.

*Rs 538/- per annum is the price for third party motor insurance for two wheelers of not more than 75cc (non-commercial and non-electric)

#Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

*₹ 1.5 is the Comprehensive premium for a 2015 TVS XL Super 70cc, MH02(Mumbai) RTO with an IDV of ₹5,895 and NCB at 50%.

*Rs 457/- per annum (1.3/day) is the price for the third-party motor insurance for private electric two-wheelers of not more than 3KW (non-commercial). Premium is payable on an annual basis