A car is a crucial asset in every Indian household. With rising repair and maintenance costs, vehicle owners prefer to invest in car insurance policies. Depending on vehicle owners’ needs, car insurance policies are classified into different types, such as own-damage insurance, comprehensive insurance and more.
Often, vehicle owners get confused between bumper-to-bumper car insurance and own-damage car insurance. In this blog, we will learn in detail about the difference between zero depreciation or bumper-to-bumper and own damage insurance.
Understanding Own-Damage Car Insurance
Own-damage Insurance is a type of car insurance policy that provides protection for damages to one’s own vehicle caused by various incidents such as accidents, natural disasters, theft, or vandalism.
This coverage ensures that if your car is damaged in an accident, stolen, or vandalized, you will not have to bear the full financial burden of repairs or replacement. It offers a sense of security and financial protection, helping to avoid significant out-of-pocket expenses.
Understanding Bumper-to-Bumper Car Insurance
Bumper-to-bumper car insurance, also called zero-depreciation insurance, is a type of insurance coverage that offers complete coverage to vehicles without factoring the depreciation value.
This means that the insurer will cover the full replacement cost of damaged parts without factoring in how much those parts have depreciated over time, which is usually the case in standard insurance policies. It is mostly available as an add-on in comprehensive or own-damage car insurance plans.
Difference between Car Insurance: Bumper to Bumper and Own Damage Insurance
The difference between bumper-to-bumper or zero depreciation and own-damage car insurance is usually determined based on coverage and other factors.
| Parameters | Bumper-to-Bumper Car Insurance | Own-Damage Car Insurance |
| Coverage | The bumper-to-bumper car insurance offers complete protection to the vehicle and its parts. | The best own-damage car insurance offers protection to insured vehicles due to damages caused by accidents, theft, fire, etc. |
| Depreciation | Under a bumper-to-bumper car insurance policy, no depreciation is applied. This means policyholders will get the full replacement cost for the parts regardless of age. | In own-damage car insurance, depreciation is applied. This means the insurance provider will deduct the depreciation value of parts when calculating claims. |
| Ideal For | This type of car insurance policy is ideal for new vehicles or high-value cars, as it offers extensive protection. | It is ideal for older vehicles or cars with a lower market value where cost-effective coverage is preferred. |
| Premium | The premium of bumper-to-bumper car insurance is higher due to the extensive coverage and lack of depreciation factor. | The premium of own damage insurance is lower because the coverage is more limited and depreciation is considered. |
Conclusion
Having your own-damage insurance and bumper-to-bumper car insurance depends on the individual’s vehicle needs. If you own a high-end vehicle with expensive parts, then it is best to have zero depreciation or a bumper-to-bumper add-on in your car insurance plan.
Vehicle owners with lower-value models having own-damage car insurance is a smart choice as it offers sufficient coverage while keeping premiums lower.
