Digit
headset_mic account_circle
mail
Sign In
  • Products

    Motor

    • Car Insurance
    • Two Wheeler/Bike Insurance
    • Commercial Vehicle Insurance
    • Taxi/Cab Insurance
    • Auto Rickshaw Insurance
    • Truck Insurance

    Health

    • Health Insurance
    • Super Top-up Health Insurance
    • OPD Health Insurance
    • Arogya Sanjeevani Policy
    • Personal Accident Insurance
    • Corporate Health Insurance

    Other

    • International Travel Insurance
    • Flight Delay
    • Shop Insurance
    • Home Insurance
  • Claims

    • File a Claim
    • File Health Claim
    • File Motor Claim for Garages
    • COVID-19 Assistance
    • Claim Status
  • Renewals
  • Become an Agent
  • Digit Products

    Motor Insurance

    • Car Insurance 25% OFF
    • Two Wheeler/Bike Insurance
    • Commercial Vehicle Insurance
    • Taxi/Cab Insurance 15% OFF
    • Auto Rickshaw Insurance
    • Truck Insurance

    Health Insurance

    • Health Insurance
    • Super Top-Up Health Insurance
    • OPD Health Insurance
    • Arogya Sanjeevani Policy
    • Personal Accident Insurance
    • Corporate Health Insurance

    Other Insurance

    • International Travel Insurance
    • Flight Delay
    • Shop Insurance
    • Home Insurance
  • Claims

    File a Claim

    File Health Claim

    File Motor Claim for Garages

    COVID-19 Assistance

    Claim Status

  • Renewals

    Become an Agent

  • Support
    Sign In
    • edit Edit Policy
    • download Download Policy
    • person_pin My Service Requests
    • check Check Policy Status
    call 1800-258-5956 whatsapp 70260 61234 mail_outline hello@godigit.com

    Our WhatsApp number cannot be used for calls. This is a chat only number.

  • My Account
    account_circle
    • autorenew Renew My Policy
    • download Download My Policy
    logout SIGN OUT
    call 1800-258-5956 whatsapp 70260 61234 mail_outline hello@godigit.com

    Our WhatsApp number cannot be used for calls. This is a chat only number.

  • login
  • about
  • contact
  • careers
More Products

Motor

  • Car Insurance
  • Two Wheeler/Bike Insurance
  • Commercial Vehicle Insurance
  • Taxi/Cab Insurance
  • Auto Rickshaw Insurance
  • Truck Insurance

Health

  • Health Insurance
  • Super Top-up Health Insurance
  • OPD Health Insurance
  • Arogya Sanjeevani Policy
  • Personal Accident Insurance
  • Corporate Health Insurance

Other

  • International Travel Insurance
  • Flight Delay
  • Shop Insurance
  • Home Insurance

Support

close
account_circle
  • edit Edit Policy
  • download Download Policy
  • person_pin My Service Requests
  • check Check Policy Status
  • autorenew Renew My Policy
  • download Download My Policy
logout SIGN OUT
call 1800-258-5956 whatsapp 70260 61234 mail_outline hello@godigit.com

Our WhatsApp number cannot be used for calls. This is a chat only number.

Switch to Digit Insurance

Trusted by 2 crore Indians

  • Health
    Health
  • Pay as you Drive
    Car Side View
    Car
  • trending icon

    Third-party premium has changed from 1st June. Renew now

    Motorcycle Side View
    Bike
  • auto rikshaw
    Commercial
  • Up to 17% Off
    Travel Airplane
    Travel
  • More products
    More
ENTER YOUR CAR NUMBER
keyboard_arrow_right
DON'T KNOW YOUR CAR NUMBER?
keyboard_arrow_right
renew digit policy keyboard_arrow_right

I agree to the  Terms & Conditions

Terms and conditions

    Enter valid registration number
    Please enter valid City name
    DON'T KNOW REGISTRATION NUMBER?
    keyboard_arrow_right
    I KNOW MY REGISTRATION NUMBER
    keyboard_arrow_right
    IT'S A NEW BIKE
    keyboard_arrow_right
    RENEW DIGIT POLICY
    keyboard_arrow_right

    I agree to the  Terms & Conditions

    keyboard_arrow_right
    IT'S A NEW BIKE
    keyboard_arrow_right
    RENEW DIGIT POLICY
    keyboard_arrow_right

    I agree to the  Terms & Conditions

    Most Popular(You can select more than one)

    I agree to the  Terms & Conditions

    As mandated by Spanish Authorities your travel insurance needs to extend 15 days after your trip ends.
    We will extend your coverage period accordingly.

    false false false false false false false false false false false false

    Port my existing Policy

    keyboard_arrow_right
    or renew digit policy keyboard_arrow_right

    I agree to the  Terms & Conditions

    You can select more than one member

    • -+ Max kids
      (s)
    ENTER YOUR REGISTRATION NUMBER
    keyboard_arrow_right
    DON'T KNOW YOUR REGISTRATION NUMBER
    keyboard_arrow_right
    or renew digit policy keyboard_arrow_right

    I agree to the  Terms & Conditions

    Terms and conditions

    Terms and conditions

    Switch to Digit Insurance
    • Health
    • Car
    • Bike
    • Commercial
    • Travel
    • More Products

    Depreciation in Insurance

    Everything eventually loses its value over time be it your most valuable asset, such is the nature of life. We all buy new things and get used to using them in two days’ time and then they are no longer new for us.

    The monetary value of items is also calculated based on their age, condition, and usage. The more an item is used, the lesser monetary value it will hold. 

    What is Depreciation in Insurance?

    Depreciation in insurance is the loss of value of a car with time, as each part of the car wears out with tiIn checkingme, the value of your car also diminishes. And this is not only with a car, but the same also goes for your mobile, laptop, bike and any other assets. Depreciation is the decrease in value due to decay or regular wear and tear of your vehicle.

    Think about this! You bought the latest iPhone XS in approx. Rs. 90,000 today, do you think if you go to the market after two years you would be able to sell it for Rs. 90, 000 only? Of course not. It is a universal fact!

    Used items will have less value. The price of your iPhone will decrease because of obvious reasons, after two years it will not be as good as new. 

    How fast does your car value decrease?

    Same as your iPhone, your car’s value too decreases very fast. When you buy the car it is new and after a few minutes, it is already used. The value of your car decreases to 91% of the initial market value the minute you purchase it. Its value drops quickly once it is used.

    The car value continues to drop year after year. Car depreciation calculator uses the following values:

    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

    How is Depreciation Calculated in Insurance?

    Generally, depreciation is calculated by evaluating an item’s Replacement Cost Value and its life span. RCV represents the current cost of repairing the item or replacing it with a similar item, while life expectancy is the item’s average expected lifespan. 

    For example, if your car meets with an accident and most of its parts have been destroyed. You bought the car two years ago and it was in normal condition for its age before the accident. A similar car is of Rs.6 lakh today (the RCV). This car has a life expectancy of five years, meaning it loses 20% of its value each year. Because your car was two years old, it had lost 40% of its value before being destroyed in the accident. 

    Depreciation for your car is calculated in 2 ways:

    • Your new car depreciates automatically the moment you hit the road, that very moment it loses 5% of its ex-showroom price and its value continues to depreciate. This is known as overall depreciation, which usually comes into the picture in case of total loss or theft.
    • In case of partial loss of your car, the depreciation is calculated on specific parts of your car that need to be replaced.

    Read below to know the percentage of depreciation deductions. 

    Depreciation Deductions

    The depreciation deductions listed below are designed by The Insurance Regulatory and Development Authority of India (IRDA):

    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

    We at Digit believe in providing the best car insurance add-ons and benefits to our customers so that they can make the most of their policies. One such very beneficial add-on cover is Zero Depreciation cover, now if you have this add-on cover with your comprehensive car insurance policy, you have a jackpot! This add-one cover gives you 100% coverage, covers every inch of your car leaving a certain engine damage, tyres, batteries, and glass. It is zero depreciation or Nil depreciation car cover that leaves out the depreciation from the insurance cover, thus ensuring complete coverage.

    Explain it like I'm five

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

    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

    ✓ How is depreciation calculated for mobiles?

    1) In most cases for mobile insurance, a  surveyor assesses the depreciation – and the verdict is based on their opinion! This means that your depreciation isn’t set in stone, and it’s based on the assessor’s judgement. 2) There is a pre-defined ‘fixed slab’ of depreciation based on the age of your product (that’s how we do things at Digit!) Since your depreciation doesn’t depend on a surveyor’s assessment, there’s less to-and-fro, making the process simple, clear and fast.  

    1) In most cases for mobile insurance, a  surveyor assesses the depreciation – and the verdict is based on their opinion! This means that your depreciation isn’t set in stone, and it’s based on the assessor’s judgement. 2) There is a pre-defined ‘fixed slab’ of depreciation based on the age of your product (that’s how we do things at Digit!) Since your depreciation doesn’t depend on a surveyor’s assessment, there’s less to-and-fro, making the process simple, clear and fast.  

    Please try one more time!

    Request URL:
    Status Code:
    Request Payload:
    Response Data:

    More Insurance Guides

    Types of Insurance

    Types of General Insurance

    Deductibles in Insurance

    Depreciation in Insurance

    What is Consequential Damges

    Subrogation in Insurance

    What is IRDA

    How to get International Driving License in India

    Buy Insurance Policy Online

    All about FASTag Card

    What is an Insurance Actuary?

    List of Car Insurance Companies in India

    List of Two Wheeler Insurance Companies in India

    List of Health Insurance Companies in India

    List of General Insurance Companies in India

    List of Insurance Companies in India

    List of Life Insurance Companies in India

    List of Term Insurance Companies in India

    Nominee in Insurance

    Why Life Insurance is Important?

    Show more

    Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.

    View Instant Premium

    Switch to Digit Insurance

    close
    digit
    Health
    digit
    Car
    digit
    Bike
    digit
    Commercial
    digit
    Travel
    digit
    Property
    1. Digit Insurance
    2. Insurance Guides
    3. Insurance Depreciation

    Last updated: 2022-08-08

    Digit
    • about
    • contact
    • career
    Products
    • Car Insurance
    • Bike Insurance
    • Travel Insurance
    • Health Insurance
    • Property Insurance
    • Shop Insurance
    • Group Health Insurance
    • Arogya Sanjeevani Policy
    • Commercial Vehicle Insurance
    • Super Top-up Health Insurance
    • Flight Delay
    Resources
    • Blog
    • Press
    • Download Policy
    • Grievance Redressal Procedure
    • Cancel e-Mandate
    Agent & Partnerships
    • Become an Agent
    • Become Digit POSP
    • Garages claim intimation
    Services
    • Claims
    • Renewals
    • Digit Cashless Garages
    • Digit Cashless Hospitals
    Get our app
    Download man
    App Store Google Play

    Other Products
    • Fire Insurance
    • Burglary Insurance
    • Building Insurance
    • Bus Insurance
    • Tractor Insurance
    • Commercial Van Insurance
    • Passenger Carrying Vehicle Insurance
    • Heavy Vehicle Insurance
    • Goods Carrying Vehicle Insurance
    • Activa Insurance
    • Jupiter Insurance
    • Bullet Insurance
    Health Insurance Guides
    • Individual Health Insurance
    • Family Health Insurance
    • Health Insurance for Parents
    • Health Insurance Premium Calculator
    • Compare Health Insurance
    • Health Insurance for Senior Citizens
    • Health Insurance with Maternity Cover
    • Corona Kavach Policy
    • Corona Rakshak Policy
    • हेल्थ इन्शुरन्स
    • फैमिली हेल्थ इन्शुरन्स
    Car Insurance Guides
    • Third Party Car Insurance
    • Comprehensive Car Insurance
    • Zero Depreciation Car Insurance
    • NCB in Car Insurance
    • IDV Calculator for Car
    • Bumper to Bumper Car Insurance
    • Car Insurance Calculator
    • Own Damage Car Insurance
    • Comprehensive vs Third Party Insurance
    • Compare Car Insurance
    • Find Vehicle Registration Details Online
    Bike Insurance Guides
    • Third Party Bike Insurance
    • Comprehensive Bike Insurance
    • Zero Depreciation Bike Insurance
    • NCB in Two Wheeler Insurance
    • IDV Value Calculator for Bike
    • Add-on Cover in Bike Insurance
    • Bike Insurance Calculator
    • Own Damage Bike Insurance
    • Comprehensive vs Third Party Bike Insurance
    • Compare Bike Insurance
    • Royal Enfield Insurance
    • TVS Insurance
    • Hero Bike Insurance
    Other Guides
    • Types of Insurance
    • Types of General Insurance
    • Types of Motor Insurance
    • International Driving License
    • Visa on Arrival for Indians
    • Visa Free Countries for Indians
    • Comprehensive vs Zero Depreciation
    • Coronavirus Health Insurance
    • Coronavirus Symptoms Checker
    • Indian Passport Rank
    • Digit Illness Group Insurance
    • Hero Splendor Insurance
    • Access Insurance
    • Scooty Insurance
    Calculators
    • SME Buddy Calculator
    • Home Loan EMI Calculator
    • Bike Loan EMI Calculator
    • Car Loan EMI Calculator
    • HRA Exemption Calculator
    • Sukanya Samriddhi Yojana Calculator
    • SIP Calculator
    • RD Calculator
    • SWP Calculator
    • GST Calculator
    • PPF Calculator
    • Personal Loan EMI Calculator
    • EMI Calculator
    • Individual Income Tax Slab
    • Tax Saving Options other than 80C
    Finance Guides
    • What is Credit Score
    • Public Provident Fund
    • How to Open PPF Account?
    • How to open Sukanya Samriddhi Account
    • What is GST?
    • GST Registration in India
    • PAN Card
    • Aadhaar Card
    • Property Tax
    • Road Tax
    • Passport Process
    • Income Tax Slabs
    • How to Save Income Tax in India
    • Tax Deductions under Section 80C
    Traffic Rules
    • PUC Certificate
    • Vehicle Registration Certificate
    • New Traffic Fines
    • Fine for Driving without Helmet
    • Types of Driving Licence in India
    • Driving Licence in Delhi
    • Driving Licence in Bangalore
    • Driving Licence in Jaipur
    • Bangalore Traffic Fines
    • Pune RTO Fine
    • Own Damage Insurance
    Business Products
    • Business Insurance
    • Management Liability Insurance
    • General Liability Insurance
    • Workmen Compensation Insurance
    • Fidelity Insurance
    • Professional Liability Insurance
    • Money Insurance Policy
    • Sign Board Insurance
    • Plate Glass Insurance
    • Erection All Risk Insurance
    • Contractors' All Risks Insurance
    • Directors and Officers Liability Insurance
    • Marine Cargo Insurance
    • Contractors Plant and Machinery Insurance
    RTO Offices in India
    • RTO Office
    • RTO Pune
    • RTO Ahmedabad
    • RTO Bangalore
    • RTO Mumbai
    • RTO Delhi
    • RTO Lucknow
    • RTO Thane
    • RTO Chennai
    Important Links
    • Digit Insurance Reviews
    • Car Insurance Reviews
    • Bike Insurance Reviews
    • Commercial Vehicle Insurance Reviews
    • Travel Insurance Reviews
    • Health Insurance Reviews
    • Mobile Insurance Reviews
    • Become a Digit Partner
    • General Insurance Agent
    • Health Insurance Agent
    • Motor Insurance Agent
    Car Brands & Models
    • Maruti Insurance
    • Toyota Car Insurance
    • Tata Car Insurance
    • Hyundai Car Insurance
    • Kia Car Insurance
    • Mahindra Car Insurance
    • Tata Tiago Insurance
    • Tata Nexon Insurance
    • Hyundai i20 Insurance
    • Creta Insurance
    • Baleno Insurance
    Downloads Do Not Disturb (DND) Public Disclosures Investor Relations Stewardship Policy IRDAI Privacy Policy

    CIN: U66010PN2016PLC167410, IRDAI Reg. No. 158.

    Go Digit General Insurance Limited (formerly known as Oben General Insurance Ltd.) - Registered Office Address - 1 to 6 floors, Ananta One (AR One), Pride Hotel Lane, Narveer Tanaji Wadi, City Survey No.1579, Shivaji Nagar, Pune-411005, Maharashtra | Corporate Office Address - Atlantis, 95, 4th B Cross Road, Koramangala Industrial Layout, 5th Block, Bengaluru-560095, Karnataka