All You Need To Know About Bumper To Bumper Insurance

According to the Motor Vehicles Act of 1988, it is compulsory for all vehicles running on Indian roads to have a motor insurance policy. This policy offers round-the-clock financial protection to vehicles from damages caused due to accidents, thefts, and other similar unfortunate incidents.

Although the Motor Vehicles Act, compels the vehicle owners to at least have third-party liability insurance, people often opt for a comprehensive car insurance plan. It not only offers protection against all the third-party liabilities but also compensates for own damages by your car in case of a road accident, theft, fire, natural/man-made disasters, or any other unpleasant incident.

Even though this plan offers extensive coverage but that still isn’t enough due to specific exclusions. For example, the cost of depreciation is not covered under this plan.

To bridge the gap, insurance providers offer add-on covers. For example, Bumper to Bumper insurance or zero depreciation plans, personal accident cover to the owner-driver of the vehicle, etc.

Bumper to Bumper Car Insurance

Bumper To Bumper Insurance India

Bumper to Bumper or zero depreciation cover helps in enhancing the coverage of the policyholder’s comprehensive car insurance plan.

Under this plan, the policyholder receives the total cost of replaced car parts, without any depreciation deduction. At the time of claim settlement, the policyholder will have to pay only the amount related to deductibles.

Bumper to Bumper insurance for cars provides complete coverage for rubber, fiber, and metal parts without reducing any depreciation value.

Key features of Bumper to Bumper Insurance for four-wheelers

Here are the features of this plan:

  • Bumper to Bumper insurance for four-wheelers is referred to as Nil Depreciation cover/Depreciation Waiver scheme; however,it cannot be purchased as a standalone plan.
  • The premium amount for this cover is significantly higher than a regular comprehensive plan. The policyholder should pay 10% to 20% extra on premium if he or she opts for a Bumper to Bumper insurance plan.
  • With this cover, the policyholder will be saved from paying a considerable amount while getting the vehicle repaired for damages. This means the policyholder will have complete peace of mind.
  • It should be noted that Bumper to Bumper insurance is not available for cars that are more than 5 years old.
  • There is a specific limit to the maximum number of claims a policyholder can file for under this insurance plan.
  • It does not protect against damages caused to car engines following water ingression or oil leakage, and the regular tear of components such as tyres, clutch plates, etc.
  • This plan does not cover any mechanical breakdowns that do not lead to an accident.
  • This plan also has a certain amount of mandatory deductible in the case of any claim request, be it for a standard comprehensive policy or a Bumper to Bumper insurance policy. The policyholder will have to pay for the deductible amount from his or her pocket.
  • A maximum of only two claims can be filed against a Bumper to Bumper insurance for four-wheelers during the policy tenure. However, the actual number of claims that can be filed is different from one insurance provider to another.

Who should Purchase Bumper to Bumper Insurance for a car?

Bumper to Bumper insurance plans are only beneficial under given aspects:

  • People who have bought a brand new car
  • People who own expensive fancy and luxury cars
  • People who are new to driving or are inexperienced drivers
  • People who are living in accident-prone areas
  • People who own premium cars with costly spare parts

What does the Depreciation of a car mean?

The value of a car decreases over timedueto constant wear and tear, which means that the car loses its financial value with time. This depreciation not only has a significant impact on the car’s market value but also on the claim settlement amount that the policyholder gets at the time of claim settlement.

One of the major reasons behind this is that the car owner is bound to bear the cost of depreciation of his or her vehicle and its spare parts. Therefore, at the time of claim settlement, the insurance provider deducts the amount related to depreciation from the sum assured.

That is when Bumper to Bumper add-on rider or zero depreciation/ nil depreciation cover helps the policyholder.

With Bumper to Bumper insurance for cars, the responsibility of paying for the depreciation of the car shifts to the insurance provider at the time of insurance claim settlement.

Rate of Depreciation

According to the Motor Vehicles Act, there is a fixed percentage of depreciation applicable to the car’s parts and accessories based on which the insurance provider decides upon the claim settlement amount.

Parts of the Car Depreciation value
Parts that have a high risk of wear and tear like plastic parts, batteries, rubber parts, tyres, tubes, etc. 50%
Paintwork 50%
Glass and fiberglass parts 30%
Metallic parts of the car 0%-5%

Zero Depreciation v/s Comprehensive Car Insurance Policy

The table given below will explain in detail why Zero Depreciation plan is better than a standard comprehensive car insurance policy:

Basis Car insurance (with zero depreciation add-on) Car insurance (without zero depreciation add-on)
Premium Comprehensive plans with zero-depreciation are costlier than a standard plan without the Bumper to Bumper cover Comprehensive policies without Bumper to Bumper cover offer lower premiums in comparison to policies with Bumper to Bumper cover
Claims Plans with Bumper to Bumper cover have higher claim amounts as the cost of depreciation is not deducted from the sum insured Plans without Bumper to Bumper cover have lower claim amounts as the cost of depreciation is deducted from the sum insured
Age of the vehicle Bumper to Bumper insurance is only available for cars less than five years of age Available for cars of all ages

However, the insurance provider has the right to render the claim null and void if:

  • Any private vehicle is being used commercially
  • The driver does not have a valid driving license
  • The driver is driving the car under the intoxication of drugs or alcohol
  • The driver is found to be involved in any malicious activity or illegal driving.
  • The claim request is not filed in the prescribed period following the incident

Benefits of Bumper to Bumper Car insurance Plan

Check out the advantages of Bumper to Bumper or zero depreciation car insurance plan as given below:

  • Since this plan covers the depreciation cost, the payable claim amount increases
  • It helps in protecting the policyholder’s hard-earned money because if this cover is not there, the policyholder will get the claim amount after deducting the depreciation cost of the vehicle which in turn decreases the claim amount
  • The add-on covers are available at affordable rates

Bumper to Bumper insurance plans offered by insurance providers

  • Bajaj Allianz General Insurance
  • Bharti AXA General insurance
  • Chola MS General Insurance Company
  • Edelweiss General Insurance Company
  • Future Generali India Insurance Company Ltd.
  • Go Digit General Insurance Limited
  • HDFC ErgoGeneral Insurance Company Ltd.
  • Iffco Tokio General Insurance Company Ltd.
  • Kotak General Insurance Co. Ltd.
  • Liberty General Insurance Ltd.
  • National Insurance Company Ltd.
  • The New India Assurance Co. Ltd.
  • The Oriental InsuranceCo. Ltd.
  • Raheja QBE General Insurance Company Limited
  • Reliance General Insurance Company
  • Royal Sundaram General Insurance Co. Ltd.
  • SBI General Insurance Company Limited
  • Shriram General Insurance Company
  • TATA AIG General InsuranceCompany Limited
  • United India Insurance Company Limited
  • Universal Sompo General Insurance Co. Ltd.

*We does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

Factors Affecting Bumper To Bumper Insurance for a four-wheeler

  • Insured’s Declared Value (IDV) of the policyholder’s car
  • No Claim Bonus (NCB), if any
  • Liability premium of your car may vary every year
  • Cubic capacity (CC) of the policyholder’s vehicle
  • Geographical location
  • Add-on covers (though they are optional)
  • Accessories that have been used in the car (though it is optional)

Inclusions and Exclusions of Bumper to Bumper Car Insurance

Given below are the factors that are included and excluded from zero depreciation or Bumper to Bumper insurance:

Inclusions

  • This plan covers fiberglass spare parts, rubber parts, plastic, and nylon parts
  • This cover can be purchased at the time of purchasing or renewal of a car insurance policy
  • While Bumper to Bumper cover promises to approve the entire claim amount, in a standard comprehensive cover depreciation rates from 0% to 40% are deducted from the sum assured at the time of the claim settlement process
  • Bumper to Bumper insurance is best suited for new cars that are maximum of 3 years old
  • The number of claims that can be filed during the policy term varies from one insurance provider to another insurance provider

Exclusions

  • Bumper to Bumper insurance cover does not include normal wear and tear or uninsured damages that might be caused to the vehicle
  • Bumper to Bumper insurance plan does not provide coverage for any car damage caused by tyres, gas kits, fuel kit, mechanical breakdown, etc.
  • If the policyholder wants to enjoy the benefits of Bumper to Bumper cover, then he or she will have to renew the plan every year

How to Claim Bumper to Bumper Insurance?

The process of filing for the claim for Bumper to Bumper or zero depreciation plans is the same as the standard car insurance policy. The steps to be followed are given below:

  • The policyholder has to inform the insurance provider as soon as possible to register his or her claim
  • Send the vehicle for damage inspection so that the estimate can be ascertained. The policyholder has to ensure that he or she gets full compensation
  • The policyholder will then have to send his or her car for repair at the network garage where the cost of repairing will be settled directly by the insurance provider
  • He or she will then have to fill, sign, and submit the customer satisfaction for and take their car home

Why is Bumper to Bumper Insurance Cover Popular Among Car Owners?

Bumper to Bumper car insurance has become a popular add-on cover among car owners, especially among first-time car buyers. Bumper to Bumper car insurance covers the depreciation cost in the claim amount, which gives new car owners some assurance and they are at peace. This plan is also popular among car owners who have drivers.

It is also the most sought-after insurance add-on among people with high-end and luxury cars. The spare parts and accessories of these luxury cars are costly, so if the plan covers these features with a nominal amount of extra premium car owners don’t mind doing so.

FAQs

Q1. Is comprehensive insurance and Bumper to Bumper insurance plan the same?

No. a Comprehensive insurance plan is a standard plan where Bumper to Bumper cover can be taken as an add-on rider. However, the policyholder can take up a Bumper to Bumper plan without a basic plan.

Q2. Does Bumper to Bumper insurance cover bodily damages caused to the car?

It covers all kinds of damages to the car parts that are made of rubber, plastic, fiberglass, and metal.

Q3. Can policyholders claim car insurance for car dents?

Car dent is usually not covered by most car insurance plans, including the Bumper to Bumper insurance cover.

Q4. What is Insured Declared Value or IDV?

The Insured’s Declared Value of the car is considered as the ‘sum insured’ that shall be fixed at the beginning of each period of the policy for each vehicle that is insured.

The IDV is to be fixed based on the manufacturer’s selling price and the model of the car proposed for insurance at the inception of the insurance policy or renewal of policy along with adjusted depreciation value.

Q5. Should the policyholder buy a Bumper to Bumper insurance plan for used cars?

Bumper to Bumper or zero depreciation cover is recommended for new cars orexpensive cars that require higher maintenance. However, he or she can buy a cover if their vehicle is not more than five years old.  Otherwise, there is no point in purchasing this cover as it only will increase the car insurance premium.

Q6. How many times Bumper to Bumper insurance plan can be claimed?

Usually, the maximum time a policyholder can claim Bumper to Bumper car insurance cover is twice during the policy term. However, this can vary from one insurance provider to another insurance provider.

Q7. Are tyres covered under Bumper to Bumper insurance?

No, replacement of tyres is not covered under the Bumper to Bumper or zero depreciation plans.