The Insurance Regulatory and Development Authority (Irda) on Wednesday brought out a proposal to include paint material in the list of items that have depreciation rates. These rates apply to replacement of parts for partial loss claims in respect to vehicles and accessories and is covered by the General Regulation (9) of the erstwhile India Motor Tariff.
It is applicable for motor insurance claims under own damage category in motor insurance segment. In an exposure draft, Irda said different practices were being followed by general insurers with regard to the application of depreciation on painting.
“The Authority has received representation from the General Insurance Council highlighting the need to recognise the depreciation aspect and also to have a uniform practice across the country and across all the non-life insurance companies,” said the Irda draft.
The authority said paint would be included in the category of ‘rubber, nylon/plastic parts, tyres and tubes, batteries and air bags’ which at present attract 50 per cent depreciation.