An Exhaustive Guide to Bumper to Bumper Policy

Bumper-to-bumper insurance is a type of comprehensive four-wheeler insurance policy that provides comprehensive coverage with the added benefit of a zero depreciation add-on. As a result, it offers comprehensive protection to the policyholder against financial losses caused by damage to the car or theft. The term bumper-to-bumper car insurance policy refers to the extensive coverage that extends from the front bumper to the rear bumper of the vehicle, encompassing all the major parts of the car.

Unlike other insurance policies, bumper-to-bumper insurance does not deduct depreciation from the value of the car parts that have been repaired or replaced. If your car is damaged in an accident or stolen, you will receive a higher claim amount, which covers the cost of repair or replacement without any deductions. In the case of a comprehensive insurance policy that provides maximum protection for your vehicle, a bumper-to-bumper insurance policy by Tata AIG might be the right choice-buy car insurance now. By choosing this policy, you can rest assured that your car is protected against all the risks associated with owning a vehicle.

[Also see: Compare car insurance]

First Understand These Important Points in Car Insurance

Coverages Not Available Under Comprehensive Car Insurance

During a traumatic car accident, it can be disheartening to find out that your comprehensive online car insurance only covers a portion of the costs. That is because the insurance company does not provide the full amount of the claim. The amount you are eligible to receive will not include the following items.

Compulsory and Voluntary Deductibles in Car Insurance:

A compulsory deductible is a predetermined amount deducted from your insurance claim by the car insurance provider. The mandatory deductible amount can vary based on engine size, vehicle age, and the type of car. However, this amount does not impact the car insurance premium.

On the other hand, a voluntary deductible is an agreed-upon portion of the insurance claim that the policyholder pays in the event of a claim. This amount is based on the policyholder’s ability to pay and the risk associated with the car. Therefore, opting for a higher voluntary deductible can lower the car insurance premium. For example, a driver with a good income and confidence on the road may choose a higher voluntary deductible to save money in the long term.

Depreciation is another factor that affects car insurance, i.e., a decrease in the value of a vehicle over time due to age and wear and tear. The depreciation is proportional to the Insured Declared Value of the car, and as a result, it affects the insurance premium.

Bumper-to-Bumper Coverage

A comprehensive car insurance policy does not provide coverage such as regular wear and tear of a vehicle or indirect damage caused by a direct loss. For example, engine damage due to hydrostatic loss is not covered.

When a claim is made, the insurance company will apply depreciation to the damages to determine the final amount to be paid. Therefore, the policyholder is responsible for paying the difference between the new part’s market cost and the insurer’s depreciated value, which can be a substantial portion of the total claim.

To avoid depreciation deductions, one can opt for a car insurance bumper-to-bumper add-on cover, also known as Zero Depreciation cover. This policy offers 100% coverage for all metal, rubber, and fibre parts of the car without any deductions for depreciation. However, the policyholder must pay an additional premium to obtain this coverage.

Let us say you were involved in a collision, and the cost to repair your car was Rs. 60,000. With a comprehensive insurance policy, you may have to pay a portion of that cost due to depreciation, which could be anywhere from ₹15,000 to ₹20,000. However, you wouldn’t have to pay depreciation deductions if you have a bumper-to-bumper or Zero Depreciation add-on cover. Instead, you would receive total compensation for the damages sustained by your vehicle.

Comprehensive Motor Insurance vs Bumper-to-Bumper Motor Insurance

Feature	Comprehensive Plan	Bumper-to-Bumper Plan
Availability for Vehicles	All ages	Up to 5 years (with exceptions)
Premium of car insurance	Lower	Higher
Number of Claims Allowed	Unlimited till IDV is available	Limited
Deduction for Depreciation	Deducted from claim amount	Not deducted from claim amount
Resulting Claim Payout	Reduced	Higher.

Limitations of Zero Depreciation Coverage:

Zero Depreciation coverage has certain restrictions. For example, it does not provide coverage in the following circumstances:

Cars that are older than three years
Engine damage caused by oil leaks or water infiltration
Simple wear and tear on items such as tires, bearings, and clutch plates
Using a personal vehicle for commercial purposes
Failure to file a claim within the designated time frame
Driving while under the toxic influence of alcohol or drugs
Operating a vehicle without a valid licence
Engaging in illegal or intentional acts while driving Additionally, there may be restrictions on the number of claims that can be made under this policy. It’s important to note that there is always a compulsory deductible component to a claim, regardless of whether you have a bumper-to-bumper plan, and the holder of the policy is responsible for paying this amount.

Conclusion

Bumper-to-bumper insurance is a comprehensive car insurance policy offering complete coverage for your car, from the front to the rear. It provides protection against financial losses caused by damage to the car or theft and does not deduct depreciation from the value of the car parts that have been repaired or replaced. However, it has certain restrictions and does not cover certain circumstances, such as cars older than three years, engine damage caused by oil leaks or water infiltration, and more.