Motor Depreciation Rates on Parts, and IDV
Two age tables that do different jobs. One trims a repair bill, the other fixes the sum insured. A surveyor uses both.
A motor policy carries two depreciation tables, and mixing them up is the commonest mistake in motor claims questions. The parts schedule cuts the cost of new parts fitted in a repair, by material and by the vehicle's age. The IDV grid sets the vehicle's sum insured at the start of each policy year, and matters only for a total loss.
A surveyor's regulations make depreciation part of the job: the surveyor recommends whether it applies, at what percentage, and how much. Both tables below are the India Motor Tariff schedules, as insurers still print them in their private car package wordings.
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Depreciation on Parts Replaced, by Material
| Part | Depreciation |
|---|---|
| Rubber, nylon and plastic parts, tyres and tubes, batteries and air bags | 50% |
| Fibreglass components | 30% |
| All parts made of glass | Nil |
| All other parts, including metal and wooden parts | By the vehicle's age (next table) |
| Painting | 50%, on the material cost only. In a consolidated painting bill, material is taken as 25% of the total |
The Two Age Tables Side by Side
Same age bands, different jobs. Left: metal and other parts in a repair claim. Right: the IDV for theft or total loss.
Not exceeding 6 months
Metal and other parts
Nil
IDV depreciation
5%
6 months to 1 year
Metal and other parts
5%
IDV depreciation
15%
1 to 2 years
Metal and other parts
10%
IDV depreciation
20%
2 to 3 years
Metal and other parts
15%
IDV depreciation
30%
3 to 4 years
Metal and other parts
25%
IDV depreciation
40%
4 to 5 years
Metal and other parts
35%
IDV depreciation
50%
5 to 10 years
Metal and other parts
40%
IDV depreciation
IDV agreed between insurer and insured
Over 10 years
Metal and other parts
50%
IDV depreciation
IDV agreed between insurer and insured
| Age of vehicle | Metal and other parts | IDV depreciation |
|---|---|---|
| Not exceeding 6 months | Nil | 5% |
| 6 months to 1 year | 5% | 15% |
| 1 to 2 years | 10% | 20% |
| 2 to 3 years | 15% | 30% |
| 3 to 4 years | 25% | 40% |
| 4 to 5 years | 35% | 50% |
| 5 to 10 years | 40% | IDV agreed between insurer and insured |
| Over 10 years | 50% | IDV agreed between insurer and insured |
Each Band Starts Just After the Last One Ends
The wordings say "exceeding 1 year but not exceeding 2 years" and so on. A car exactly 2 years old is in the 1-2 year band; a car of 2 years and one day is in the 2-3 year band.
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Worked Example: A Repair Claim
Illustrative figures. Private car, 2 years 4 months old, so metal parts are in the 2-3 year band at 15%. Excess left out to keep the arithmetic clear.
Front bumper (plastic)
Bill
₹12,000
Rule
50%
Depreciation
₹6,000
Allowed
₹6,000
Windscreen (glass)
Bill
₹9,000
Rule
Nil
Depreciation
₹0
Allowed
₹9,000
Front door (metal)
Bill
₹15,000
Rule
15% by age
Depreciation
₹2,250
Allowed
₹12,750
Painting, consolidated bill
Bill
₹10,000
Rule
50% of material, material = 25% of ₹10,000 = ₹2,500
Depreciation
₹1,250
Allowed
₹8,750
Labour
Bill
₹4,000
Rule
Not a part replaced
Depreciation
₹0
Allowed
₹4,000
Total
Bill
₹50,000
Rule
Depreciation
₹9,500
Allowed
₹40,500
| Item | Bill | Rule | Depreciation | Allowed |
|---|---|---|---|---|
| Front bumper (plastic) | ₹12,000 | 50% | ₹6,000 | ₹6,000 |
| Windscreen (glass) | ₹9,000 | Nil | ₹0 | ₹9,000 |
| Front door (metal) | ₹15,000 | 15% by age | ₹2,250 | ₹12,750 |
| Painting, consolidated bill | ₹10,000 | 50% of material, material = 25% of ₹10,000 = ₹2,500 | ₹1,250 | ₹8,750 |
| Labour | ₹4,000 | Not a part replaced | ₹0 | ₹4,000 |
| Total | ₹50,000 | ₹9,500 | ₹40,500 |
Reading the Example
Gross bill ₹50,000, depreciation ₹9,500, assessed amount ₹40,500 before the policy excess. The insured bears the ₹9,500, because new parts replace old ones and indemnity does not pay for the improvement.
The schedule applies only to parts replaced. Labour is not a part, so it is paid in full. Glass carries no depreciation at any age, and plastic carries 50% even on a new car.
Where IDV Comes In
IDV gets its own page in the IC-11 cluster. The points a surveyor needs on a claim:
- IDV
- The Insured's Declared Value: the manufacturer's listed selling price less the age-based depreciation in the grid, fixed at the start of each policy period. It is the sum insured.
- Used only for total loss
- The wordings apply the IDV grid to total loss and constructive total loss claims only. A repair claim uses the parts schedule.
- No further depreciation in the year
- IDV is treated as the market value for the whole policy period. A car stolen in month 11 is settled on the same IDV as one stolen in month 1.
- Constructive total loss
- When the cost of retrieval and repair exceeds 75% of the IDV, the wordings treat the vehicle as a constructive total loss.
Tariff Tables, Not a Current IRDAI Rule
Both tables come from the India Motor Tariff, from before detariffing. Under IRDAI's 2024 master circular, each insurer's Product Management Committee approves its own IDV criteria and depreciation scale. Insurers such as Shriram General and IFFCO Tokio still print these exact tables, but the scale that applies to a claim is the one in that insurer's policy wording. Learn these for S-01 and S-06; check the wording on a real claim.
FAQs
What is the depreciation on plastic parts in a motor claim?expand_more
50%, regardless of the vehicle's age, under the schedule insurers print in their private car package wordings. The same rate applies to rubber and nylon parts, tyres and tubes, batteries and air bags.
Is depreciation deducted on glass?expand_more
No. All parts made of glass carry nil depreciation under the schedule.
How is depreciation applied to painting?expand_more
At 50%, but only on the material cost of the painting. If the painting bill is one consolidated amount, the material is taken as 25% of it, so the deduction works out to 12.5% of the bill.
What is the difference between parts depreciation and IDV depreciation?expand_more
Parts depreciation reduces the cost of new parts in a repair claim. IDV depreciation fixes the vehicle's sum insured, which is what is paid on theft or a total loss. They use different rates for the same age.
What is the depreciation on metal parts for a 4-year-old car?expand_more
25% if it is over 3 years old but not over 4. Once it is past 4 years, up to 5, the rate is 35%.
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