What Covers Under Bumper-to-Bumper Car Insurance Policy?

5 min read Posted on 04 Sep 2024

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Bumper-to-bumper car insurance is also termed as “nil depreciation insurance” or zero depreciation insurance. In a general car insurance plan, the depreciation amount is subtracted from the coverage amount. But under a bumper-to-bumper policy, the depreciation amount is not subtracted thus ensuring complete coverage at the time of claims.

This coverage can be availed as an add-on coverage on your general car insurance .

Bumper-to-Bumper coverage is one of the most popular insurance covers preferred by car owners. It has gained wide acceptance in India because of the following reasons:

Covers the depreciation cost of the vehicle during a claim.
For car owners who own expensive cars, the replacement or repair cost for parts and accessories is quite high. Having a bumper-to-bumper insurance can save the car owners from incurring such expenses during accidents.
Inexperienced drivers prefer this coverage, as they are more prone to frequent accidents on the roads. This saves them from additional expenses in the event of mishaps or accidents.

What is covered under a bumper-to-bumper insurance?

The basic features and advantages offered by a car bumper-to-bumper insurance are listed as under:

High premium

The premium amount on these coverage plans is quite high as compared to general car insurance plans. The reason being greater coverage offers. They come with a premium amount that is generally higher than the premium amount on normal insurance plans. But the higher premium of bumper-to-bumper insurance plans is very much worth the benefits offered.

The age limit of the car

Bumper-to-bumper covers are more not for all cars. It is offered only for new cars. The age limit mentioned by most insurance companies is generally 5 years or less (varies from insurer to insures some may offer up to 7 and 10yrs). Sometimes, it also mentions an upper limit for the number of kilometers travelled. Hence, this coverage is not offered for old cars. Some insurers might offer coverage to very old cars at a high premium. But it is recommended not to go for such a plan as they might not prove to be much beneficial for the car owner.

Limitation on the number of claims per year

Bumper-to-Bumper Car insurance Policies imposes certain limitations on the number of claims that can be made in a year. However, it varies from insurer to insurer. Hence, it is advised to go through the policy documents carefully before purchasing.

Mandatory deduction

A nominal mandatory deduction, which is also termed as ‘File charges’ is to be paid by the car owner at the time of making any claim irrespective of the cause of the claim. This amount differs from plan to plan and is specifically mentioned in the terms and conditions.

Before purchasing a bumper-to-bumper insurance plan, one should keep in mind that it does not cover the following:

Damages to tires, car batteries, clutch plates or bearings are not covered. These are generally offered as an add-on cover, which has to be separately purchased. Zero Depreciation covers upto 50 % on Tires
Any damage to the car engine due to water ingression or oil leakage is not covered
The cost of consumables and oil change is not covered.

Other restrictions and limitations of a bumper-to-bumper coverage are as under:

Old cars are not covered. However, the age limit of the car might differ from insurer to insurer.
If a private vehicle is being used for commercial purposes, then this insurance cover will not apply.
The claim has to be raised within a stipulated timeline from the date of the incident to avail bumper-to-bumper coverage.
Accidents resulting from intoxicated driving will not qualify for such coverage.
Driving without a valid license or malicious driving will disqualify you from making any claim in the event of any mishap.

A bumper-to-bumper cover is highly recommended to every car owner due to the advantages offered by it. Mishaps and accidents are very common these days owing to the alarmingly increased rate of vehicles on the road. At the time of claiming a settlement, general insurance plans do not cover most expenses including depreciation. Moreover, cars and motor vehicles depreciate daily. Excluding the depreciation amount at the time of settlement makes the owner liable to pay for the expenses for the repairs and replacements. But having a bumper-to-bumper coverage will save the owner from incurring such huge expenses.