Understanding the Perks and Pitfalls of Bumper-to-Bumper Insurance

Despite having a comprehensive car insurance policy, you may have to shed some money when you raise an insurance claim. As annoying as it may be, your regular car insurance policy will not cover the whole of your repair expenses. In most cases, you will have to share the burden with your insurer. This may make you a little critical of your insurance policy. However, what you need here is the bumper-to-bumper car insurance policy. Read on as we explore the importance of understanding the perks and pitfalls of bumper-to-bumper insurance. 

Understanding Bumper-to-Bumper Insurance
With time, your car, just like any other machine, loses its value due to depreciation. When a claim is raised, the insurer deducts the depreciation and then clears the bill. Because of this, you are unable to receive the entire cost of repair and replacement. This is where bumper-to-bumper car insurance comes into play. 

Bumper-to-bumper is also called a zero depreciation or a zero-dep car insurance policy. It nullifies the depreciation cost of your car when a claim is raised. It allows full coverage with a depreciation deduction. The policy will offer you complete coverage for rubber, metallic and fibre parts of your car.

Let us take a look at this example. Ravi’s 2-year-old car was in a collision recently. The garage billed him at ₹50,000. Out of this, Ravi had to pay ₹20,000 from his own pocket as he had regular car insurance. If he had the bumper-to-bumper cover, he would hardly have paid anything. 

Understanding the Perks and Pitfalls of Bumper-to-Bumper Insurance
Now that we have established what bumper-to-bumper insurance is, let us take a look at its pros and cons. Understanding all the aspects of zero depreciation or bumper-to-bumper will allow you to choose the right coverage for your car. 

The Perks 
Every insurance policy comes with certain exclusions. With the bumper-to-bumper add-on, you can cover the gap in insurance. Here’s how:
Bumper-to-bumper Can Save You From Depreciation
Did you know that the value of your car starts decreasing the minute you take it out of the showroom? Only with this add-on, will you be able to enjoy complete coverage, and make the most of your comprehensive car insurance. 

Lesser Out-of-pocket Spending
Despite having comprehensive insurance, you have to bear a chunk of the repair bills. Your IDV, (insured declared value) will keep decreasing due to the wear and tear. You can mitigate this loss with the bumper-to-bumper add-on.

Get a Higher Claim Settlement
With the bumper-to-bumper add-on, you can get a higher claim and save on spending extra.

Repairs are Expensive
The Indian automobile industry is seeing many new and expensive cars. The repair of these cars can make a big hole in the pocket. With a zero zero-dep policy, you can save yourself from such unforeseen expenses. 

The Pitfalls
While the advantages of a bumper-to-bumper car insurance policy can overshadow its pitfalls, it is essential to keep the following points in mind:

It is Only for Cars that are Less Than 5 Years Old
You might not be able to get the coverage of the bumper-to-bumper add-on if your car is older than 5 years.

A Higher Premium
While you will be able to save when you raise a car insurance claim, be ready to shed out a higher premium for the coverage. The premium with this add-on can be more by up to 20%.

Limited Number of Claims
With a comprehensive cover, there are no limits to how many claims you can make in a year. With bumper-to-bumper, however, you will be able to make only 2 to 3 claims in a year. The number of claims you can make depends on the insurance company you choose.

Only When You Raise a Claim
It should be remembered that a zero dep or bumper-to-bumper add-on does not actually save your car from everyday wear and tear. The cover will only save you from paying for the loss due to depreciation and will be applicable only when you raise a claim. 

Is it Worth Buying a Bumper-to-bumper Add-on?
If the higher premium is the only thing stopping you from buying a bumper-to-bumper add-on, then you need to think again. It can save you from spending a much higher amount due to depreciation. Notwithstanding the diminishing value of your car, the claim will be settled in its entirety in the case of an accident and damage. Understanding bumper-to-bumper insurance will greatly help you make a well-informed decision. 

Let’s Wrap It Up
A bumper-to-bumper car insurance policy offers overall protection to your car. It also gives you the satisfaction that even in case there is an accident, your car will be well-covered. You would not have to dig into your savings to pay the repair bills. Choosing the bumper-to-bumper cover can thus be a smart step. While adding this add-on to your policy will raise the premium by 15% to 20%, you can greatly enhance the coverage. You will surely save more in the long run.

Analyse your car insurance needs and your budget and choose wisely.