A bumper-to-bumper car insurance plan, or the zero-depreciation cover, is an add-on cover for a motor insurance policy. You can purchase it along with a comprehensive policy. The add-on cover is best suited if you own a new, or luxury or premium category car. It is also recommended for new drivers and for those who tend to take the accident-prone roads often.
Why should you buy bumper-to-bumper car insurance?
When you claim under your comprehensive policy, your insurer deducts the depreciation amount from the claim amount. Depreciation, or the damage caused to your car due to regular use, sets in the moment you take the car out from the showroom. It is around 5% of the total ex-showroom price at the time of purchase and increases every year.
Depreciation can affect you more in case of theft or damage beyond repair. You can lose a significant chunk of your claim amount as a result. Bumper-to-bumper car insurance can help offset the depreciation and help you receive the entire insured declared value of your car. This add-on policy covers all kinds of damages to the car’s body, including parts made of rubber, fiber glass, plastic, nylon, and metal. It saves you from paying anything out of your pocket to fix or replace them, particularly in the case of luxury cars where some parts may have to be imported.
Exclusions of the policy
The exclusions of the policy vary from insurer to insurer as it covers the own-damage components. The general exclusions are:
- Only two claims will be covered in a policy period. Any subsequent claims will not be covered.
- Your claim will be rejected if the car is used for any illegal or unethical activity.
- If you had bought the car for personal use but later decided to use it for rental or commercial purposes, then the damage would not be covered in future.
- The car insurance policy should be active at the time of making a claim. Any claim made against an expired policy would get rejected.
- You must raise the claim within the set deadline as specified by the insurer. In failing to do so, your claim will get rejected.
- If the driver is in an intoxicated state at the time of the mishap, the claim will be rejected.
- Damages due to mechanical breakdownarenot covered under this policy.
- It does not cover damage to accessories and consumables such as screws, nuts, and bolts.
- Damage to the car engine due to oil leakage or water ingestion is not covered. You have to get a separate engine protection add-on cover for it.
- The policy does not cover damage to the battery, tyre, glass, bi-fuel kit, gas kits and bearing.
Thus, the bumper-to-bumper car insurance covers the depreciation amount that insurance companies deduct while settling your claim. It keeps your savings intact by avoiding paying out-of-pocket for the depreciation.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.