A new scooter will not always carry the same value. It reduces gradually with use, age, and regular wear and tear, and this reduction in value is known as depreciation. In motor insurance, depreciation has an important role as it impacts repair costs and claim settlements.
If you own a scooter or plan to insure one, it is important to understand the scooter depreciation rate and how it affects your two-wheeler insurance coverage.
Which Scooter Parts are Subject to Depreciation?
In insurance, depreciation applies to parts that lose value over time. When you raise a claim, the insurer considers the reduced value of these parts before deciding the payable amount.
Common scooter parts that are subject to scooter depreciation include:
- Rubber and plastic components such as tyres, tubes, and body panels
- Fibre-glass parts used in the scooter body
- Metal parts such as engine components
- Paintwork and certain accessories
- Battery and electrical components
Rubber and plastic parts usually attract higher depreciation because they wear out faster. Metal components, on the other hand, generally have lower depreciation rates due to their longer lifespan.
Standard Scooter Depreciation Rates in India
Depreciation rates usually depend on the age of the scooter and insurers commonly follow standard percentage deductions based on how old the vehicle is.
The table below shows an indicative age-wise depreciation chart:
|
Age of the Scooter
|
Depreciation 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
|
Negotiated between the insurer and the policyholder
|
Apart from vehicle age, specific materials may have fixed depreciation rates. For example, rubber and plastic parts may attract around 50% depreciation, no matter what is the age of the scooter.
Similarly, petrol and electric scooter depreciation rates may differ slightly.
How Depreciation Affects Scooter Insurance Claims
Depreciation has a direct role in how much payout you receive during a claim. When your two-wheeler is repaired after an accident or damage, the insurer considers the reduced value of the parts being replaced. The depreciation amount is deducted from the repair cost before the final claim amount is calculated.
For instance, if a plastic part of your scooter needs replacement after an accident, a fixed percentage is deducted from the cost of the new part as depreciation. You have to pay the remaining amount from your own pocket.
This deduction process generally applies under comprehensive two wheeler insurance, where repair expenses are covered as per policy terms, deductibles, and applicable depreciation.
Zero Depreciation Add-On for Scooters and its benefits
A zero-depreciation add-on is an optional cover you can choose with a comprehensive two-wheeler insurance. It reduces or removes the depreciation deduction on specific parts when a claim is settled, meaning the claim amount is calculated without considering the reduced value of those parts.
Here is how the zero depreciation add-on benefits you:
- Lower out-of-pocket expenses from your side during repairs
- Coverage for parts that usually face higher depreciation, such as plastic or rubber components
- Clarity on how repair costs are calculated
- Added financial protection, especially for new scooters
Conclusion
Depreciation is an important part of scooter ownership and insurance coverage. It affects your scooter’s value over time and influences the claim amount paid for repairs or replacement. Understanding the scooty depreciation rate helps you understand your financial responsibility in case of damage.
Checking the two wheeler insurance policy terms and available add-ons helps you understand what you are covered for and what you may need to pay during claim settlement.
FAQs
1. What is the standard depreciation rate for scooters in bike insurance?
Depreciation rates depend on how old your scooter is. They usually begin at about 5% for newer vehicles and may go up to around 50% for scooters that are about five years old.
2. Does scooter depreciation differ from bike depreciation?
Depreciation rules are generally similar for scooters and motorcycles. However, the applicable rate may vary based on parts, usage, and insurer guidelines.
3. Which scooter parts attract the highest depreciation rate?
Rubber, plastic, and fibre-glass components usually attract the highest depreciation because they wear out faster than metal parts.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.