In Car Insurance, depressions directly affect your claim amount. Know how to get full compensation from its rates, effects on the claim and zero depressance cover. You can save thousands of rupees by choosing the right policy.
Think, you bought your favorite car with great hard work and also took insurance for it. But whenever it comes to accident or repair, why does the claim amount get less than your expectation? The biggest reason for this is depression.
In car insurance, depression is a factor that directly affects your claim. This is the reason that nowadays people want to understand this aspect well while choosing a car insurance.
If you also want to know what depression is and how it affects your insurance claim, then this blog is for you.
Also, we will see how modern insurance options, such as Acko policyIn this case, cars try to provide better facilities to owners.
What is depressing in car insurance?
In car insurance, depressions mean, with time the value of your car and its parts is reduced. As the car is old, its price decreases. When you apply for a claim, the insurance company pays according to the decreasing price of the car parts, does not pay the full price. This is called depressance.
If your car is less than 5 years old, then a better way to avoid it is to take ‘zero depraction cover’ add-on of Acko Car Insurance. In which a little premium is more, but at the time of claim, you do not have to bear the depression of the car parts and you get the full amount.
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Depressed rates in car insurance
It is very important to understand the rates of depressions in car insurance so that you can get the right amount during the claim. These rates are fixed according to the age of the car and the declared price (IDV) and are determined by the Insurance Regulatory Authority of India (IRDAI).
The rates of depressions in car insurance are as follows:
| Car age | Depressance rate |
| Up to 6 months | 5% |
| 6 months to 1 year | 15% |
| 1 year to 2 years | 20% |
| 2 years to 3 years | 30% |
| 3 years to 4 years | 40% |
| 4 years to 5 years | 50% |
| More than 5 years |
Insurance and Customer Decided with the consent of |
Keep in mind that up to 50% depressions of different parts of the car such as rubber, plastic, tires or batteries may be applied, while up to 30% on fiberglass and glass parts such as glass parts do not have any depression. This means that in the claim you do not get full compensation for the cost of these parts.
What is the effect of Depressing on a car insurance claim?
In car insurance, depressions directly affect your claim money. Let’s understand with an easy example:
- Suppose it costs ₹ 10,000 to replace a part of your 3 year old car (eg steering or light).
- According to the insurance rules, a 3 -year -old car will have a 30% depression.
- This means, the insurance company will believe that the current price of that part is only ₹ 7,000 (because 30% of ₹ 10,000 i.e. ₹ 3,000 was reduced).
- After this, if your policy also has a ‘compositionary deductable’ (such as ₹ 1000), it will also be reduced from this ₹ 7,000.
- So, in the end you will find in the claim: ₹ 7,000 – ₹ 1000 = ₹ 6,000
That is, you spent ₹ 10,000, but because of depression you got only ₹ 6,000 back.
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Factors affecting car insurance depressions
In car insurance, many things affect depression such as:
- Car age: The older the car is, the more its depression will be. For example, a 5 -year -old car will get very little cover than new.
- car maintenance: If your car is not servicing on time or its condition is bad, then its depression will be considered more.
- Mileage: The value of a more moving car decreases quickly, as its parts are quickly worn out.
- Parts quality: Rubber, battery, fiber parts are more depressed (eg: up to 50% depressions in rubber parts).
- Luxury or Normal Car: Expensive or luxury cars have high depression rates, as their parts are expensive.
- Fuel type: CNG/electric cars have a different rate at a different rate.
- Market demand: If there is a high demand for a model, then the decompression of that car is less.
How to reduce car insurance depressions?
It is very easy to reduce the impact of depression in car insurance. Just keep these things in mind:
- Take zero depressions cover: This car is the best way to reduce insurance depressions. It gives you full money at the time of claim, without cutting the depression. Best for trains up to 5 years old.
- Pay attention to maintenance: Get your car serviced on time and also pay attention to maintenance.
- Understand ad-on covers: Add rider such as engine protection, return to invoice etc. to your policy.
- Choose the right model: The car that has high demand in the market is slightly less. Therefore, choose the right model while taking a car.
conclusion
Buying hard work helps to take the right insurance for your car and to understand the effect of depression. Depressions directly affects your car insurance claim amount. The older the car is, the more effect will be on your claim. But if you take steps in advance, such as taking zero depressions cover or taking care of the car properly, this effect can be reduced to a great extent.