A zero depreciation or bumper-to-bumper auto insurance policy is a good insurance option as it provides complete insurance to the policyholder by not considering the depreciation cost of the vehicle or its parts.

It is, in fact, one of the most popular add-on plan in car insurance. This rider is also referred to as ‘nil depreciation’ cover or ‘depreciation waiver’ policy or ‘bumper-to-bumper’ insurance by different insurers.

However, this insurance cover has its own set of disadvantages. The policy does not cover the following scenarios:

  • Cars that are more than three years old
  • Engine damage due to oil leakage or water ingression
  • Wear and tear to tyres, bearings, clutch plates, etc
  • Private vehicle being used for commercial purposes
  • Claim was not raised within the specified time
  • Driving under the influence of alcohol or any other intoxicants
  • Driving without a valid license
  • Illegal or malicious driving

Do note there are also restrictions on the number of claims that will be covered under the zero-depreciation policy. There is a compulsory deductible component to a claim. Thus, irrespective of whether a bumper-to-bumper plan is chosen or not, the policyholder will have to bear the expenses corresponding to this deductible.

On the whole, a bumper-to-bumper plan is a useful add-on cover that can be used to enhance the protection you receive from your normal car insurance policy. While you will have to pay an additional premium to get this rider, you will certainly find it to be useful when you raise an insurance claim.