Depreciation on Car Parts in a Claim: Metal, Plastic, Glass and Paint

After a repair claim, many owners are surprised to pay thousands of rupees at the garage even though the claim was approved. The reason is depreciation on parts — a different schedule from the one used to fix IDV.

The rates

How paint is treated

Painting has two parts: material (paint, primer, thinner) and labour. Depreciation of 50% applies only to the material cost. If the garage gives a single consolidated painting bill, the material component is taken as 25% of it. So the effective deduction on a consolidated paint bill is 12.5%.

A fully worked claim

A car aged 2 years 7 months (metal rate 15%) has front-end damage. The surveyor approves:

With the ₹1,000 compulsory deductible, the insurer pays ₹20,550 and the owner pays ₹8,950. With zero-depreciation cover, the insurer would pay ₹28,500 and the owner only ₹1,000.

Tyres and batteries

Tyres, tubes and batteries carry 50% depreciation. Standard wordings also limit tyre and tube cover: damage to them is generally paid only if the vehicle is damaged at the same time, and then up to 50% of the replacement cost. Tyre-protection add-ons exist for this reason.

Why insurers apply depreciation

When a worn part is replaced with a new one, the owner ends up with something better than before the accident. Depreciation adjusts for that “betterment”. Zero-depreciation cover removes the adjustment for a price.

A two-wheeler example

A scooter aged 1 year 6 months (metal rate 10%) is damaged in a fall:

After the ₹100 compulsory deductible, the insurer pays ₹5,902 and the owner pays ₹3,198 — more than a third of the bill, almost all of it depreciation on plastic parts.

How to keep depreciation deductions down

• Ask about repair instead of replacement. Depreciation applies to parts that are replaced. Where a part can be safely repaired (dent removal, plastic welding), the cost is labour, which has no depreciation.
• Check the surveyor’s assessment. The claim settlement sheet lists each part, its category and the rate applied. A metal part wrongly listed as plastic costs you money.
• Consider zero-dep on newer vehicles. For modern cars and scooters with large plastic panels, it is often the difference between paying a few thousand rupees and paying only the deductible.

Reading your claim settlement sheet

Most insurers share an assessment or settlement summary with columns for the estimated amount, the assessed amount, the depreciation percentage and the net payable for each item, followed by the deductibles. If a figure doesn’t match the rates above, ask the insurer to explain it before you sign the satisfaction voucher.

FAQs