Depreciation in Insurance

After 1 year

your car's value decreases to 81% of the initial value

After 2 years

your car's value decreases to 69% of the initial value

After 3 years

your car's value decreases to 58% of the initial value

After 4 years

your car's value decreases to 49% of the initial value

After 5 years

your car's value decreases to 40% of the initial value

On Rubber, Nylon, Plastic Parts and Batteries

50% Depreciation is deducted

On Fiberglass components

30% Depreciation is deducted

On Wooden parts

Depreciation is deducted as per the age of the car

On parts made of glass

NIL

Explain it like I'm five

We're making insurance so simple, now even 5-year-olds can understand it.

What is depreciation?

Imagine you've just bought yourself a delicious ice cream cone.

But an ice cream is only ice cream if it's frozen, right? And even though it is perfectly frozen when you buy it, it doesn't stay that way. The forces of nature act upon it the moment you take it out of the freezer. It starts to melt.

Now suppose you want to sell your ice cream to your friend. You bought it for Rs. 100, and if you offer it to your buddy RIGHT after you bought it, it's still worth Rs. 100. But if you try to sell it 5 minutes later? It's melting! Your friend will offer you a lesser price for a melted ice cream, because its value has decreased. And the value decreases with every minute that the ice cream is out of the freezer, and the more it melts. That's depreciation!

FAQs about Depreciation in Insurance