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Important Things to Know about Bumper to Bumper Car Insurance

Bumper to bumpercover – A term that was introduced in 2009 and has become increasingly popular in the car insurance sector ever since.

In caseyou are unfamiliar about what it implies, it is extremely crucial that you learn more about it to maximise the benefits from your car insurance policy.

Also known as a zero depreciation or nil depreciation cover, it allows you, as a policyholder, to avail all-round financial protection for your car.

But, what does it exactly mean?Read on to learn more!

What does a Bumper to Bumper Car Insurance Policy Imply?

Bumper to bumper car insurance is an add-on to a comprehensive car insurance cover that offers 100% coverage for every part of your car including all rubber, fibre and metal parts.  Further, it does not take depreciation of the car into account, thus allowing policyholders to enjoy complete coverage for their vehicles.

In India, bumper to bumper insurance covers were introduced by insurance providers in 2009 and has, ever, since, become one of the more popular add-ons that vehicle owners purchase for their cars.

Who Should Avail this Add-On?

Well, ideally it makes sense for everyone to purchase this add-on with their Comprehensive Car Insurance policy, to enable maximum protection.

That said, the following categories of car owners must absolutely have such a cover in place:

  • Individuals who have purchased a new car or have a car which is less than 5 years old.
  • Drivers who are not yet practised or are inexperienced with driving.
  • Owners of expensive vehicles which come with costly spare parts.
  • Owners of high-end cars who can incur substantial losses if their vehicle gets dented or damaged.
  • Those residing in accident-prone areas.

These are the five categories of policyholders who must absolutely consider purchasing the bumper to bumper insurance to minimise their financial losses from any damage to their vehicles. 

What is the Advantage of Bumper to Bumper Cover over Standard Insurance Policies?

The most significant advantage offered by this add-on cover is that it does not take depreciation into account.

If you take a look at the fine print of your insurance policy, you will find that the depreciation calculated for various items ultimately amounts to quite a lot.

For example, according to an ordinance passed by the Insurance Regulatory and Development Authority of India (IRDA), the depreciation amount that can be deducted for various parts of your vehicle include –

  • 50% for nylon, rubber, batteries and plastic parts.
  • Increasing depreciation by 5% on wooden parts (calculated as per the age of your car).
  • 30% for fibre glass components.

Cumulatively, the depreciation amount can be substantial.

Further, the add-on covers every component and part of your vehicle (barring a few) making it much more beneficial than other comprehensive insurance policies.

Differences between Comprehensive Insurance Policy and Bumper to Bumper Cover –

We have illustrated the difference between a comprehensive car insurance with and without bumper to bumper add on in the table below:

Parameter Normal comprehensive policy Comprehensive policy with bumper to bumper cover
Coverage Coverage amount is provided after taking depreciation value of the car parts into account. 100% coverage without any depreciation. This includes full cost incurred for repairs of the external damages to the car’s body, irrespective of the depreciation.
Category of vehicle covered New as well as old vehicles are covered. Does not provide coverage to vehicles which are 5 years old and above.
Premium payment Standard premium payment Premium is a bit higher than normal comprehensive covers.

Even though you will have to pay a marginally higher premium for the add-on, the benefits imparted by bumper to bumper cover more than make up for the additional cost! 

What should you Look for Before Choosing the Add-On Cover?

Hold on!

We understand that the bumper to bumper add-on has piqued your interest, but before taking a decision there are a few things you must know about it. Take a look!

  • Insurance providers limit the number of claims raised under this cover to once per year. This is to ensure that the policyholder does not make unnecessary claims. So make sure that you verify this fact before you opt for the cover.
  • Insurance providers have made this cover available only for cars which are less than 5 years old. So if you own an older car, this cover won’t allow you to make any claims.
  • It will charge you a marginally higher premium amount than that of normal comprehensive policies. So check your premium payable before availing this add-on.

So, with these few things in mind you can proceed to opt for the bumper to bumper add-on for your comprehensive insurance policy. After all, ensuring financial safety should always be high up on our list of priorities.

About Anirudh Singh

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