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Bike insurance add-ons: Difference between Zero Depreciation Cover and Return to Invoice Cover

Team AckoJan 17, 2024

Securing your bike with a vehicle insurance policy covers you against financial losses arising from third-party liabilities or damages to your vehicle. When you are shopping for a bike insurance plan, you need to look for wholesome coverage so that you are well-protected against unforeseen liabilities. While the Comprehensive Bike Insurance policy provides financial support in the case of third-party liabilities and damages to your bike, it does not cover the depreciation of the bike or the cost of ownership.

However, add-ons can help you out in this regard. They play a key role in providing wholesome coverage by offering coverage against losses not covered by the base plan. Among the bike insurance add-ons, Zero Depreciation and Return to Invoice are designed to reduce your out-of-pocket expenses and increase the claim settlement amount. But, how different are they? Read on to learn about the difference between Zero Depreciation and Return to Invoice add-ons.

Contents

Difference between Return to Invoice and Zero Depreciation bike add-on covers
- When should you choose the Zero Depreciation bike add-on?
- Who and why should you choose the Return to Invoice (RTI) bike cover?
In a nutshell
Frequently asked questions

What is Zero Depreciation Cover in bike insurance?

As you are aware, all vehicles, be it a bike or a car, depreciate over time due to the wear and tear of vehicle parts. The value of the bike depreciates and has a direct impact on claims. Suppose your bike is damaged due to an accident; your insurer (in this case ACKO) will pay the repair bill after deducting the depreciation of the parts repaired or replaced.

This is where Zero Depreciation cover, also popularly referred to as ‘bumper-to-bumper insurance’ in motor insurance, comes into play. The add-on will cover the depreciation of the bike parts, reducing your out-of-pocket expenses. Here are a few essential points about Zero Depreciation Cover.

It is available only for bikes less than 5 years old.
Before the claim is settled, mandatory and voluntary deductibles will be deducted.
An additional premium needs to be paid to buy Zero Depreciation cover.

What is Return to Invoice (RTI) Cover in two-wheeler insurance?

Your bike insurance premium of the Comprehensive Insurance plan is primarily based on the approximate market value of the bike. In insurance terms, it is referred to as Insured Declared Value (IDV). In case of an accident that has damaged your bike beyond repair or it is stolen, then you get the approximate market value of the bike after considering the required deductibles and depreciation of the vehicle.

However, with Return to Invoice cover, it helps bridge the gap between the IDV and the purchase value of the bike. This includes registration charges and road tax. In case of vehicle theft or if it is damaged beyond repair, your insurer will pay the purchase or invoice value of the bike. Here are a few points about Return to Invoice Cover.

It is applicable if the repair cost (as per policy terms) exceeds 75% of the IDV.
This cover is activated when the bike is stolen or undergoes total loss.
The cover is helpful for persons living in high-accident prone areas or areas with high bike thefts.
An additional premium needs to be paid to buy Return to Invoice Cover.

Difference between Return to Invoice and Zero Depreciation bike add-on covers

The main aim of both the add-on covers is to bridge the gap between the repair cost and your out-of-pocket expenses. But, there is a difference between the two add-on covers. Let’s understand the difference through the below table.

Factor	Zero Depreciation	Return to Invoice
Definition	The add-on covers the depreciation of bike parts being repaired or replaced.	The add-on covers the purchase/invoice value of the vehicle if it is stolen or is damaged beyond repair.
How it works	Fills the gap between the cost of the parts being repaired or replaced and their deprecation value.	Fills the gap between the purchase cost (invoice value) and the IDV.
Example	Ms. Deepika’s bike was damaged due to an accident and needed repairs. Since she had opted for the Zero Depreciation Cover, the insurer settled the total claim amount without considering the depreciation of parts apart from applicable deductibles.	Ms. Deepika’s bike was stolen, and the police issued her a Non-Traceable Certificate. Since she has opted for the RTI cover, she got the purchase or the invoice value of the bike instead of the IDV.

When should you choose the Zero Depreciation bike add-on?

Add-ons provide an extra layer of financial protection when the base plan does not cover certain liabilities. But, you need to choose add-ons that enhance your bike insurance plan as per your needs. Here is when you should select the Zero or Nil Depreciation add-on cover.

If your bike is less than 5 years old
Do not want higher out-of-pocket expenses
Mitigate depreciation of bike parts

Example: Mr. Deepak’s bike was damaged due to an accident. The repair cost was Rs. 4,000, the insurer (for example, ACKO) pays Rs. 2,500 after considering the applicable deductibles and depreciation of the parts being repaired or replaced. However, his claim settlement amount would have been Rs. 3,500 if he had included Zero Depreciation cover along with the Comprehensive Insurance plan after deducting the applicable deductible.

Who and why should you choose the Return to Invoice (RTI) bike cover?

As mentioned above, Return to Invoice Cover pays the invoice value of the bike if the vehicle is stolen and not traceable or if the damages are beyond repair, or the damage is assessed as a total loss by the insurer. Here is who and why you should buy the RTI Cover for your bike.

Owners of a new bike
Bike owners living in an accident-prone area
Bike owners living in a theft-prone area

In a nutshell

Add-ons are a great source of policy coverage enhancement since they cover losses not covered by the base plan. While choosing add-ons, ensure that you choose only those which are useful to you. Both the Zero Depreciation and Return to Invoice add-ons cover your out-of-pocket expenses. While the former covers the gap between the cost of the parts being replaced or repaired and the depreciation value of bike parts, the latter compensates you if your bike is damaged beyond repair or in case it is stolen.

A brand new bike may not require too much maintenance or repairs; hence, the Return to Invoice Cover is useful in such scenarios. You may consider including the Zero Depreciation Cover for older bikes that may require frequent maintenance. Therefore, choose bike insurance add-on covers that fit your requirement.

Frequently asked questions

Here are some commonly asked questions about Zero Depreciation Cover and Return to Invoice Cover in bike insurance.

How is Zero Depreciation Cover different from Comprehensive Bike Insurance policy?

The Comprehensive Bike Insurance policy covers you against damages or losses incurred by the insured bike. However, the compensation will be after considering or deducting the depreciation of the bike parts being repaired or replaced and applicable deductibles. When you buy Comprehensive Bike Insurance with Zero Depreciation add-on, the compensation will be without considering or deducting the depreciation of bike parts.

Is Zero Depreciation Cover available for older motorcycles?

The add-on is applicable for motorcycles that are less than 5 years old. However, you can contact our support team for more information by writing to us at [email protected].