
When it comes to buying a two-wheeler, a lot of facets are weighed and comp...
Whenever a claim is made in car insurance, the payouts are made after considering the reduced value of some parts based on their rate of depreciation. The payment is made for the reduced amount and not for the cost of replacement of the part.
The rates of depreciation are as mentioned below:
Age of Vehicle |
% Depreciation |
Not exceeding 6 months |
NIL |
Exceeding 6 months but not exceeding 1 year |
5% |
Exceeding 1 year but not exceeding 2 years |
10% |
Exceeding 2 years but not exceeding 3 years |
15% |
Exceeding 3 years but not exceeding 4 years |
25% |
Exceeding 4 years but not exceeding 5 years |
35% |
Exceeding 5 years but not exceeding 10 years |
40% |
Exceeding 10 years |
50% |
So just to give you an example, if any part made of fibre glass is to be replaced, the insurance company will only pay 70% of the cost of replacement. So if a part costs Rs. 10,000 you would have to bear the balance Rs. 3,000 in case of a replacement.
Or in the case of a paint job, which costs Rs. 15,000 and the cost of the paint in the job is Rs. 3,000, the insurance company will only pay 50% of the cost of the paint. So you will have to shell out Rs. 1,500 from your pocket.
Fortunately some companies offer Zero Depreciation Cover as an Add-On for relatively new cars. Check out more details on Zero Depreciation cover in car insurance.
Do comment in case of any clarification or want to add more inputs to this.
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