Claim Pitfalls, Complaints and Official Sources
Depreciation in car insurance claims: rates by part and age, with a full worked settlement
The standard depreciation rates applied to parts in Indian motor OD claims, how paint, glass, batteries and tyres are treated, and a full claim settlement worked step by step.
When you claim for accident damage without a zero-depreciation add-on, the insurer deducts depreciation on the parts that are replaced, using rates in the standard policy wording: 50% on rubber, nylon and plastic parts, tyres, tubes and batteries; 30% on fibreglass parts; nil on glass; and on metal parts a rate by vehicle age, from nil under six months to 50% over ten years. Paint is depreciated 50% on the cost of paint material, not on painting labour. Labour charges for removing, refitting and repairing are paid without depreciation. On a three- to five-year-old car, these deductions commonly amount to a quarter to a third of a parts-heavy bill.
This guide is part of claim rejection reasons.
Depreciation rates in standard wordings
By type of part:
| Part type | Depreciation |
|---|---|
| Rubber, nylon, plastic parts | 50% |
| Tyres and tubes | 50% |
| Batteries | 50% |
| Airbags | 50% |
| Fibreglass components | 30% |
| Glass parts | Nil |
| Paint material | 50% of material cost |
Metal parts, by vehicle age:
| Age of vehicle | Depreciation on metal parts |
|---|---|
| Up to 6 months | Nil |
| 6 months to 1 year | 5% |
| 1 to 2 years | 10% |
| 2 to 3 years | 15% |
| 3 to 4 years | 25% |
| 4 to 5 years | 35% |
| 5 to 10 years | 40% |
| Over 10 years | 50% |
These rates come from the former India Motor Tariff and are reproduced in most private car package wordings. Insurers can file different wordings, so check your policy's "depreciation" clause. Note that these are different from the IDV depreciation slabs (5% to 50%), which set the vehicle's insured value; see the IDV guide.
Full worked settlement
Illustrative. A 1,497 cc sedan, 3 years 8 months old, hit at the front left. No zero dep. Compulsory deductible ₹1,000, voluntary deductible ₹2,500. The surveyor approves:
| Item | Type | Amount (incl. GST) |
|---|---|---|
| Front bumper | Plastic | ₹11,800 |
| Left headlamp | Plastic housing and lens | ₹9,440 |
| Left fender | Metal | ₹7,080 |
| Bonnet | Metal | ₹14,160 |
| Radiator support | Metal | ₹4,720 |
| Windscreen | Glass | ₹10,620 |
| Paint material | Paint | ₹6,000 |
| Labour (removal, refit, denting, painting) | Labour | ₹14,160 |
| Total | ₹77,980 |
Step 1: depreciation by part type.
- Plastic: (₹11,800 + ₹9,440) × 50% = ₹21,240 × 50% = ₹10,620
- Metal at 25% (3–4 years): (₹7,080 + ₹14,160 + ₹4,720) × 25% = ₹25,960 × 25% = ₹6,490
- Glass: ₹10,620 × 0% = ₹0
- Paint material: ₹6,000 × 50% = ₹3,000
- Labour: ₹0
- Total depreciation: ₹20,110
Step 2: deductibles. ₹1,000 + ₹2,500 = ₹3,500
Step 3: payable. ₹77,980 − ₹20,110 − ₹3,500 = ₹54,370
You pay the garage ₹23,610 (₹20,110 + ₹3,500). With zero dep you would pay only the deductibles of ₹3,500, saving ₹20,110 on this one claim.
The same claim on an older car
At 6 years old, metal depreciation rises to 40%:
- Metal: ₹25,960 × 40% = ₹10,384
- Total depreciation: ₹10,620 + ₹10,384 + ₹3,000 = ₹24,004
- Payable: ₹77,980 − ₹24,004 − ₹3,500 = ₹50,476
The extra ₹3,894 deduction comes only from the metal-parts rate. Plastic and paint are 50% at any age.
Checking the insurer's computation
When you receive the settlement, ask for the computation sheet and check:
- Every part is classified correctly. A metal part treated as plastic is depreciated at 50% instead of the age rate.
- The age used matches the date of first registration on the RC.
- Glass parts have nil depreciation.
- Paint depreciation is on material only, not on painting labour.
- Labour is not depreciated.
- GST is treated in the same way as the part it belongs to.
- Deductibles match your schedule.
If you find a mistake, write to the insurer with the corrected calculation. If it is not fixed, escalate through the complaints route.
Repair instead of replace
Parts that are repaired (dented, welded, refinished) rather than replaced have no parts cost, only labour, so no depreciation is applied to them. Ask the surveyor whether a part can be repaired; it may lower your out-of-pocket share, although a replaced part may suit you better for a newer car.
Using the calculator
The claim payout estimator asks for the total parts cost and an average depreciation rate. In the example above, parts excluding labour total ₹63,820 and depreciation ₹20,110, so the average rate is 31.5%. Enter compulsory ₹1,000 and voluntary ₹2,500, and add labour (₹14,160) to the result to get the total payout.
Related guides
Frequently asked questions
Is depreciation applied on a total loss?
No. A total loss is settled on the IDV (less the deductible and salvage), and the IDV already includes the age-based depreciation.
Does zero dep remove deductibles too?
No. Zero dep removes depreciation on parts. Compulsory and voluntary deductibles still apply.
Are tyres covered at all without zero dep?
Tyres damaged in an accident are covered with 50% depreciation. Tyre damage on its own, without other accident damage, is often excluded unless you have tyre protection cover.
Why is the airbag depreciated at 50%?
Standard wordings classify airbags with rubber, nylon and plastic parts. Zero dep removes this deduction.
Sources
- IRDAI — standard motor policy wordings and filed products
- Council for Insurance Ombudsmen — disputes about claim computation
- Bima Bharosa — register a complaint with the insurer
