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How Depreciation Affects Two Wheeler Insurance Premium?

Two wheeler insurance is a must for bike riders in India. Not only is it mandatory by law, but it also offers financial protection in case of an accident. However, one of the main factors that affect a two wheeler insurance premium is depreciation. 

In this blog post, we will explore how depreciation affects two-wheeler insurance premium and what you can do to minimize its impact.


Depreciation in Two Wheelers

The depreciation for a two-wheeler is different from that of a four-wheeler. In general, the value of a two-wheeler diminishes faster than that of a four-wheeler. The rate at which the value of a two-wheeler diminishes depends on various factors such as make, model, engine capacity, etc.

When it comes to insurance, the premium you pay is partly based on the depreciation value of your vehicle. So, if you own a two-wheeler, you can expect to pay a higher insurance premium than someone who owns a four-wheeler.

What is the Two Wheeler Depreciation Rate?

The two-wheeler depreciation rate is the percentage of the original value of your bike that is lost each year through wear and tear. The rate is applied to thebike’s insured value, which is its market value at the time of purchase, to work out the amount of cover you need.

Most insurers will use a standard rate of 10% for bikes up to five years old, but this can vary depending on the make and model of your bike. Newer and more expensive bikes will usually have a higher depreciation rate.

The two-wheeler depreciation rate is important because it affects how much money you’ll get back if your bike is stolen or damaged beyond repair. It’s also used to calculate your excess, which is the amount you’ll need to pay towards any claims you make.

Zero Depreciation Cover in Bike Insurance

Depreciation is one of the key factors that affect two wheeler insurance premium. In simple terms, depreciation can be defined as the reduction in the value of an asset due to wear and tear. When it comes to bike insurance, depreciation is applied to parts of the bike that are replaced in case of an accident or theft.

Zero depreciation cover is an add-on cover that can be bought with a comprehensive two wheeler insurance policy. It covers the cost of replacement of parts without any deduction for depreciation. In other words, if your bike undergoes damage due to an accident or theft, the insurer will reimburse you for the full cost of replacement of parts without any deduction for depreciation.

Thus, a zero depreciation cover protects your bike against financial losses due to depreciation. It is a valuable add-on cover, especially if your bike is new or has high market value.


Now that you know how depreciation affects your two wheeler insurance premium, you can make a more informed decision when it comes time to renew your policy. 

Keep in mind that the amount of depreciation is just one factor that insurers take into account when setting rates, so be sure to compare quotes from multiple providers before making a decision.

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