DG Set - Total loss claim

[Rajan.P, Raj Assessors & Consultants, Trichur- 680010.]

Dear sir,

 

A well maintained DG set was damaged fully due mechanical damage and fire set up after that.

 

Item         :         DG set

Capacity   :         55 kVA

Age          :         12 years

 

Please provide the guidelines on the annual depreciation percentage to be applied, in the total loss assessment.

 

--
P.Rajan
Chartered Engineer
Raj Assessors & Consultants
First Floor, Lakshmi Photostat Buildings
Opp. Power House, Viyyur.P.O,
Trichur - 680010
Kerala State
Phone. 0487 - 2320235
Mob.    9447223094

[santhanam Palaniappan]

In my opinion the life of a diesel genset is fixed 15 years.

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[R. L. AGARWAL SURVEYORS PVT LTD.]

As per the circuilar issued by NIA somewhere in 99 -00, (Copy not available with me ) depreciation on DG Set is to be deducted @15% per year.

O P AGARWAL
R L AGARWAL SURVEYORS PVT. LTD.
NEW DELHI

[R. L. AGARWAL SURVEYORS PVT LTD.]

Sorry, it is 12.5%. 15% was a typographical error

O P AGARWAL

[VENKATARAMAN R.]

Dear Sirs, 

The wordings verbatim from the MBD policy are given below:- 

----------------------------------

2. BASIS OF INDEMNITY –

a) In cases where damage to an insured item can be repaired, the

Company will pay expense necessarily incurred to restore the

damaged machine to its former state of serviceability plus the

cost of dismantling and re-erection incurred for the purpose of

effecting the repairs as well as ordinary freight to and from a

repair shop, customs duties if any to the extent such expenses

have been included in the Sum Insured. If the repairs are

executed at a workshop owned by the Insured the Company will

pay the cost of materials and wages incurred for the purpose of

the repairs plus a reasonable percentage to cover overhead

charges.

No deduction shall be made for depreciation in respect of parts

replaced except for (i) wear and tear parts and (ii) parts for which

manufacturers have specified a fixed life for use and the like but

the value of any salvage will be taken into account.

If the cost of repairs as detailed hereinabove equals or exceeds

the actual value of the machinery insured immediately before the

occurrence of the damage the settlement shall be made on the

basis provided for in (b) below.

b) In cases where an insured item is destroyed, the Company will pay

the actual value of the item immediately before the occurrence

of the loss including costs for ordinary freight erection and customs

duties if any provided such expenses have been included in the

sum insured, such actual value to be calculated by deducting

proper depreciation from the replacement value of the item. The

Company will also pay any normal charges for the dismantling of

the machinery destroyed but the salvage will be taken into

account.

-------------------------------

9. DG SET ENDORSEMENT 

‘It hereby declared that any loss or damage payable under the

policy to the cylinder head, liner and piston of the Diesel/oil

engines insured here will be indemnified subject to –

(i) 15 % depreciation per annum be made applicable to the Turbo-

charger subject to a maximum of 75 %.

(ii) Turbo-charger cannot be insured in isolation.

------------------------------- 

 

---

R. VENKATARAMAN  

| Surveyor & Loss Assessor |
| 58 Cooperative-A Colony | KK Pudur, Saibaba Colony |
| Coimbatore - 641 038 | Tamil Nadu
| Mobile: 98430-43942 | Phone: 0422-4383942, 2443942 | 

---

All communications by any media addressed from Surveyors to Insurers/Insureds/Repairers in respect of any claim of whatsoever nature are WITHOUT PREJUDICE to the rights of the Insurers on the matter of admission of liability.

---

---

From: R. L. AGARWAL SURVEYORS PVT LTD. <rla...@gmail.com>
To: insurance...@googlegroups.com
Sent: Tuesday, 23 April 2013 10:31 AM
Subject: Re: [Adjusters:13010] DG Set - Total loss claim

[Er. Jasvinder S Josan]

Rate of depreciation on cylinder head, liner and piston?

[Rajan.P, Raj Assessors & Consultants, Trichur- 680010.]

Dear Sirs,

 

As stated earlier the DG set is irreparably damaged; hence the assessment is to be done under para. b of the basis of indemnity, where in depreciaion is to be applied to arrive at the present value. Please advise on the rate of annual depreciation, method of depreciation (SLM, WDV etc), useful life of DG set etc., to assess the loss on total loss basis.

 

P.Rajan

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[bhatia...@gmail.com]

Mr Agarwal
The claims can not be nor should be governed by circulars, but the policy. I do not see any such condition in policy
C K Bhatia

Sent from BlackBerry® on Airtel

---

From: "R. L. AGARWAL SURVEYORS PVT LTD." <rla...@gmail.com>

Sender: insurance...@googlegroups.com

Date: Tue, 23 Apr 2013 10:31:11 +0530

To: <insurance...@googlegroups.com>

ReplyTo: insurance...@googlegroups.com

Subject: Re: [Adjusters:13010] DG Set - Total loss claim

[Subodh R. Raje]

Dear Mr. Rajan,

Mr. Venkatraman has given the wordings verbatim of the policy for your reference.

Kindly see the clause B of the basis of indemnity where it mentions that actual value is to be calculated "such actual value to be calculated by deducting proper depreciation from the replacement value of the item".

I feel the word "proper" should be mentioned in inverted comma and capital letters as it here that the surveyor's acumen and technical knowledge has to be applied.

One cannot apply a straight-line methodology of depreciation in items like generators where many parts get madatorily changed during the major ovehauling of the genset after a fixed period of time and the generator is as good as new genset.

One would have to check the past maintenance history of the genset, the last time when the major overhaul had been carried and what were the parts changed in it when this overhaul had been carried out. It is after considering all these aspects should the depreciation be applied and not arbitrarily on a certain percentage. Yes, you can apply the percentage depreciation to the damages caused to the specific components if they have not been changed before the major overhaul has taken place. The choice and explanation as well as justification is yours to base the percentage of depreciation.

Subodh Raje
Vadodara

-------- Original Message --------

Subject:	Re: [Adjusters:13012] DG Set - Total loss claim

Date:	Tue, 23 Apr 2013 13:12:07 +0800 (SGT)
From:	VENKATARAMAN R. <insuranc...@yahoo.co.in>
Reply-To:	insurance...@googlegroups.com
To:	insurance...@googlegroups.com <insurance...@googlegroups.com>
CC:	R. L. AGARWAL SURVEYORS PVT LTD. <rla...@gmail.com>, \Rajan.P" <trc.a...@gmail.com>, \santhanam Palaniappan" <erode.s...@gmail.com>

Dear Sirs,�

The wordings verbatim from the MBD policy are given below:-�

----------------------------------

2. BASIS OF INDEMNITY �

-------------------------------

9. DG SET ENDORSEMENT�

�It hereby declared that any loss or damage payable under the

policy to the cylinder head, liner and piston of the Diesel/oil

engines insured here will be indemnified subject to �

(i) 15 % depreciation per annum be made applicable to the Turbo-

charger subject to a maximum of 75 %.

(ii) Turbo-charger cannot be insured in isolation.

-------------------------------�

�

---

R. VENKATARAMAN �

|�Surveyor & Loss Assessor�|

| 58 Cooperative-A Colony | KK Pudur, Saibaba Colony |
| Coimbatore - 641 038 | Tamil Nadu

| Mobile: 98430-43942 | Phone: 0422-4383942, 2443942 |�

---

All communications by any media addressed from Surveyors to Insurers/Insureds/Repairers in respect of any claim of whatsoever nature are WITHOUT PREJUDICE to the rights of the Insurers on the matter of admission of liability.

---

---

From: R. L. AGARWAL SURVEYORS PVT LTD. <rla...@gmail.com>
To: insurance...@googlegroups.com
Sent: Tuesday, 23 April 2013 10:31 AM
Subject: Re: [Adjusters:13010] DG Set - Total loss claim

As per the circuilar issued by NIA somewhere in 99 -00, (Copy not available with me ) depreciation on DG Set is to be deducted @15% per year.

O P AGARWAL
R L AGARWAL SURVEYORS PVT. LTD.
NEW DELHI

On Apr 23, 2013 4:38 AM, "santhanam Palaniappan" <erode.s...@gmail.com> wrote:

In my opinion the life of a diesel genset is fixed 15 years.

On Tue, Apr 23, 2013 at 5:20 AM, Rajan.P, Raj Assessors & Consultants, Trichur- 680010. <trc.a...@gmail.com> wrote:

Dear sir,

�

A well maintained DG set was damaged fully due mechanical damage and fire set up after that.

�

Item�������� :�������� DG set

Capacity�� :�������� 55 kVA

Age��������� :���������12 years

�

Please provide the guidelines on the annual depreciation percentage to be applied, in the total loss assessment.

�

--
P.Rajan
Chartered Engineer
Raj Assessors & Consultants
First Floor, Lakshmi Photostat Buildings
Opp. Power House, Viyyur.P.O,
Trichur - 680010
Kerala State
Phone. 0487 - 2320235

Mob.� � 9447223094

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�

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�
�

[KC.G...@nic.co.in]

Sir,

Here we have to see under which policy (fire or MBD) the claim will be settled. As fire has occured after break down, it may not be easy to assess the loss due to break down, hence if the fire is extensive the claim should be settled in fire policy.

With regards,

CMA K.C.GUPTA,
Regional Manager,
Ahemadbad Regional Office,
National Insurance Company Ltd.,
Phone : 079-26581031, IP-300000-204
Cell: 09909920049(Gujrat), 09829028456 (Rajasthan)

-----insurance...@googlegroups.com wrote: -----

To: "insurance...@googlegroups.com" <insurance...@googlegroups.com>
From: "VENKATARAMAN R."
Sent by: insurance...@googlegroups.com
Date: 04/23/2013 11:22AM
Cc: "R. L. AGARWAL SURVEYORS PVT LTD." <rla...@gmail.com>, "\"Rajan.P\"" <trc.a...@gmail.com>, "\"santhanam Palaniappan\"" <erode.s...@gmail.com>
Subject: Re: [Adjusters:13012] DG Set - Total loss claim

proper depreciation from the replacement value of the item . The

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[PS Ramnathan]

Mr.Gupta has made the correct observations

The loss on account of breakdown and fire thereafter could be assessed independently and the predominant factor allowed to justify the policy to be adopted

Unless a major item such as Crank Shaft / block suffers a breakdown, in most instances, Fire would have reduced it to a 'total loss' and thereby Fire policy terms will prevail.

If there is no RIV clause attached to the Fire policy, both will lead substantially to the same final recommendation. 

Regards

PSR

P S Ramnathan

+91 924-520-3785 
+91 93448 39777 
+91 94430 97777 
Second Floor, Sapthagiri Towers,
10/8, Ramar Koil Street,
Ram Nagar,
Coimbatore - 641 009,
India
res : +91 98430 97777 

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