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Disclaimer:Tata Capital Limited (“TCL”) registered with IRDAI (License No. CA0896, valid till 21-Jan-2027), acts as a Corporate Agent “Composite” for Go Digit General Insurance Limited. Please note that, TCL does not underwrite the risk or act as an insurer. For more details on the risk factors, terms and conditions please read sales brochure carefully of the Insurance Company before concluding the sale. Participation to buy insurance is purely voluntary.

The Registered office of TCL is Tata Capital Limited, 11th Floor, Tower A, Peninsula Business Park, Ganpatrao Kadam, Marg, Lower Parel, Mumbai-400013.
The Registered Office of Go Digit: Go Digit General Insurance Limited, 1st Floor, Fairmont, Hiranandani Business Park, Powai, Mumbai – 400076.

What is the Impact of Depreciation on Your Car Insurance Policy?

What Factors Affect the Car Depreciation Rate?

How to Calculate Depreciation in Car Insurance?

The car’s age and Insured Declared Value (IDV) determine its depreciation value. The older the car, the higher the depreciation incurred. The manufacturing year of the car is also considered while calculating the depreciation on car parts. 

Your insurance company will calculate the exact amount of depreciation after considering the routine wear and tear for various car parts like tires and tubes, nylon parts, wooden inserts, batteries and airbags, fibreglass, and paint, excluding the glass parts.   

The Insurance Regulatory and Development Authority of India (IRDAI) has regulated the depreciation rates on different parts of the car as follows. 

Parts Wise

Depreciation Rate (%)

Rubber, Nylon and Plastic Parts

50%

Fiber Glass

30%

Glass

Nil

Car Paint

50% depreciation on the material cost of total painting charges. 25% of the total painting charges (in case of consolidated bill of painting charges).

How to Reduce the Impact of Depreciation on Car Insurance?

FAQs about Impact of Depreciation in Car Insurance