Policyholders likely to gain as Irdai proposes changes to motor policy

For partial loss claims, age-wise depreciation has been recommended, wherein if the vehicle is less than a year old, the depreciation will be 10 per cent

A working group of the Insurance Regulatory and Development Authority of India (Irdai) has proposed age-based depreciation in value of vehicles to calculate the sum assured for motor vehicles in a bid to remove subjectivity and ambiguities in claim settlements.

The working group has said that for private cars, the sum insured can be computed by taking the current listed price of the vehicle, including the value of all accessories fitted by the manufacturer, and adjusted by age-wise depreciation. It said the sum can also be computed by taking the current day on-road price, including invoice value, road tax and registration