A bumper-to-bumper insurance policy is a cover that provides your vehicle with complete, all-round insurance by leaving out the depreciation from the insurance cover. This insurance is known by many names such as zero depreciation or nil depreciation vehicle insurance.

You must understand that the regular wear and tear of a vehicle is not covered under a comprehensive car insurance policy. Hence, in the event of a claim being raised, the damage incurred by the vehicle will not be fully compensated by the insurer, because they would take depreciation of the vehicle in mind.

However, this is not the case with bumper-to-bumper or zero depreciation insurance cover. Under this insurance, if your vehicle gets damaged following an accident, no depreciation will be subtracted from the coverage of wearing out of any body parts of car excluding tyres and batteries. Thus, the insurance company would be liable to bear the entire cost of the body part for replacement.

A bumper-to-bumper or nil depreciation car insurance policy offers 100% coverage for all fibre, rubber and metal parts without deduction of any depreciation.

Let’s take an example to understand this better. Say the workshop where you repaired your vehicle charged you Rs. 50,000 for the damages incurred by your car in an accident. You might have to pay Rs.25,000-30,000 for the depreciation of the vehicle parts. This is the case when you only have comprehensive car insurance. However, if you have the zero-depreciation cover, then there would be no deductions on the claim amount based on depreciation and you can get a significantly higher amount from the insurance company.

Do note, though that the bumper-to-bumper insurance policy does not cover engine damage due to water ingression or oil leakage. Further, no mechanical breakdown, oil change or consumables are covered in this policy. The policy also comes with a limit on the number of claims one can put in a year.