In case of theft or accident, insurance company takes care to give the maximum insurance possible. For this, at the time of purchase insured declared value or IDV is calculated. Insured declared value is determined by deducting the depreciation for the used period of the vehicle based on its company, model, year of make, purchase value, etc. In case the repair cost is more than 75% of the insured amount, then it is considered constructive total loss.
Calculation of depreciation:
The depreciation is determined based on the usage period. Depreciation is the first factor taken for determining insured declared value.
Period of usage Depreciation (%)
Below 6 months 5
6-12 months 15
1-2 years 20.
2-3 years 30
For repair or new spares…
In case of accident, it costs to have repairs or get new spares if needed. For this purpose, you may avoid total insurance claim and just ask for a part of it. the depreciation of spares does not depend on the age of the vehicle.
· Rubber, nylon, plastic, tyres, tubes, batteries, airbags -50%.
· Fiber glass parts – 30%.
· Spares made of glass – none.
· Other spares (including made of wood) depend on the vehicle usage period.
Period of usage depreciation (%)
Below 6 months none.
6-12 months 5
1-2 years 10.
2-3 years 15
3-4 years 25
4-5 years 35
5-10 years 40
Above 10 years 50
While buying motor insurance, geographical limits are set based on the location of purchase.
Private vehicles and two wheelers are divided into two zones for India.
Zone A: Ahmadabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, Pune.
Zone B: All other areas of India.
Generally, vehicles registered in Zona A have a higher premium. Some insurance companies doesn’t provide insurance if the vehicle is out of the geographic limit.
Per motor vehicle act, we can increase the geographic limit of our vehicle. For insurance geographic limit extension to Bangladesh, Bhutan, Nepal, Srilanka, Pakistan, Maldives, the premium costs 500 more and other policies cost 100 more. The same condition applies for all types of vehicles.
In these extended areas, there will be no insurance coverage in case of damage, for the passengers in the vehicle, or damage incurred while transporting the vehicle air or on water.