Why was depreciation deducted from my car insurance claim?

Depreciation is deducted because the policy's own wording says so. One insurer's standard private car wording, for example, pays for replaced parts after deducting 50% on rubber, plastic, tyres and batteries, 30% on fibreglass, nothing on glass, and an age-based rate on all other parts, such as metal ones. A nil-depreciation add-on, if your schedule lists one, removes that deduction for the number of claims it allows, so check the rates applied against your own wording and your vehicle's age on the date of the loss.

Depreciation is the policy's way of saying a new part is worth more than the worn one it replaces. It is a written term, so the questions are factual: which rate, which part, which age band, and whether you bought an add-on that removes it. ClaimAssure forms no view on the amount you should be paid and is not a depreciation calculator; this page shows how to check the deduction against your policy.

How the rates work in a standard private car policy

One insurer's Private Car Package Policy, used here as an example, pays for parts replaced 'subject to a deduction for depreciation at the rates mentioned below in respect of parts replaced'. These are that insurer's rates; your own policy wording sets yours, and where its summary sheet and the policy document differ, the policy document prevails.^{[1, 2]}

What a nil-depreciation add-on changes

If your schedule lists a nil-depreciation (zero-depreciation) add-on, the example insurer's summary sheet says that on a partial-loss claim admissible under the add-on, no depreciation is deducted for replaced parts, including tyres, tubes and rubber or plastic parts, for the number of claims mentioned in the schedule. Check how many claims your add-on allows and how many you have already used.^[2]

Depreciation is not the only deduction

The compulsory deductible is separate. The same insurer's summary sheet sets it at ₹1,000 for private cars below 1500cc and EVs, and ₹2,000 above 1500cc, on own-damage claims only; its sample calculation takes depreciation off first and the deductible after.^[2]

How to check your assessment

1. 1

   Get the itemised assessment.

   Ask the insurer or the surveyor for the assessment that shows each part, its cost, and the depreciation applied to it.

2. 2

   Check the vehicle's age band.

   Work out the vehicle's age on the date of the loss, ask the insurer which start date it counted from, and find the band it falls in.

3. 3

   Check each part's category.

   A part counted as metal when it is plastic, or the other way round, changes the rate.

4. 4

   Check labour lines.

   The example wording applies depreciation in respect of parts replaced; if your assessment deducts it from labour, ask which clause allows that.^[1]

5. 5

   Raise the differences in writing.

   Write to the insurer with each item you dispute. If it is not corrected, it becomes a grievance, and the insurer should resolve a complaint within 14 days. Questioning a survey report has a letter outline.^[3]

ClaimAssure is an independent private platform. It is not an insurer, IRDAI, Bima Bharosa or the Insurance Ombudsman, it never files anything on your behalf, and it cannot promise any outcome. What it does is read your documents and show you what they say.

More on motor insurance claims