Need a clarification on arriving depreciation for TL / CTL claims on motor policy– Very important.
P.L. SIVAKUMAR
Dear senior motor surveyors,
We are normally arriving the vehicle assessment on repair basis as per the following chart given in motor policy.
For all rubber / nylon / plastic parts, tyres and tubes, batteries and air bags - 50 %
For fiber glass components – 30 %
For all parts made of glass – Nil
Rate of depreciation for all other parts including wooden parts will be as per the following schedule
Age of vehicle % depreciation
Not exceeding 6 month ……………………………. Nil
Exceeding 6 months but not exceeding 1 year 5%
Exceeding 1 year but not exceeding 2 year 10%
Exceeding 2 year but not exceeding 3 year 15%
Exceeding 3 year but not exceeding 4 year 25%
Exceeding 4 year but not exceeding 5 year 35%
Exceeding 5 year but not exceeding 10 year 40%
Exceeding 10 …………………………………. 50%
When it is a total loss / Constructive total loss claim we are applying above same depreciation schedule. After deducting depreciation, if the assessment exceeds 75% if IDV we treat the claim as total loss. This is the normal practice.
Applying above depreciation chart in total loss claim is correct?
When go through the policy, under a heading of SUMINSURED – INSURED’S DECLARED ( IDV ) mentioned as follows.
“ The schedule of age-wise depreciation as shown below is applicable for the purpose of total loss / Constructive total loss ( TL/CTL ) claims only.
THE SCHEDULE OF DEPRECIATION FOR FIXING IDV OF THE VEHICLE
|
Age of vehicle |
% of depreciation for fixing IDV |
|
Not exceeding 6 month |
5% |
|
Exceeding 6 month to 1 year |
15 % |
|
Exceeding 1 year but not exceeding 2 year |
20 % |
|
Exceeding 2 year but not exceeding 3 year |
30 % |
|
Exceeding 3 year but not exceeding 4 year |
40 % |
|
Exceeding 4 year but not exceeding 5 year |
50 % |
Under the same heading the following word is appeared
“ The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and / or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75 % of the vehicle.
Conclusion: There is no category of parts Like, Metal, fiber, Plastic & glass seen in that schedule. Shall we apply the above schedule for CTL / TL claims?
With regards,
P.L.SIVAKUMAR
Surveyor & Loss assessor
9a, Kundalakesi street ,
Vannarpet, Tirunelveli.
Tamilnadu, S. India .
Mobile : 0 98430 57530
Phone : 0462 - 2500209
Tel Fax: 0462 - 2500209
P.L. SIVAKUMAR
With regards,
P.L.SIVAKUMAR
Surveyor & Loss assessor
9a, Kundalakesi street ,
Vannarpet, Tirunelveli.
Tamilnadu, S. India .
Mobile : 0 98430 57530
Phone : 0462 - 2500209
Tel Fax: 0462 - 2500209
From: SUSHANTA KUMAR ROY <sushanta_...@yahoo.com>
To: insurance...@googlegroups.com; ila-m...@googlegroups.com; iiisl...@googlegroups.com; insurance-su...@googlegroups.com; keep-in-touch-su...@googlegroups.com
Sent: Wed, 6 July, 2011 6:15:53 PM
Subject: Re: {Surveyors:8770} Need a clarification on arriving depreciation for TL / CTL claims on motor policy– Very important.
To-Mr. P.L. Sivakumar
Dear Sir,
For assessment purpose even for total loss, the first chart is applied.The second chart is considered for valuation purpose or for determining IDV of the vehicle at the time of underwriting.
With best regards,
S.K.Roy
Kolkata
Mob-9830358774
From: P.L. SIVAKUMAR <plsiva...@yahoo.co.in>
To: ila-m...@googlegroups.com; iiisl...@googlegroups.com; insurance...@googlegroups.com; insurance-su...@googlegroups.com; keep-in-touch-su...@googlegroups.com
Sent: Wed, July 6, 2011 6:02:53 PM
Subject: {Surveyors:8770} Need a clarification on arriving depreciation for TL / CTL claims on motor policy– Very important.
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Ramesh
Dear Friends,
I quote below from the tarrif.
“The Insured’s Declared Value (IDV) of the vehicle will be deemed to be the ‘SUM INSURED’ for the purpose of this tariff and it will be fixed at the commencement of each policy period for each insured vehicle.
The IDV of the vehicle is to be fixed on the basis of manufacturer’s listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance /renewal and adjusted for depreciation (as per schedule specified below). The IDV of the side car(s) and / or accessories, if any, fitted to the vehicle but not included in the manufacturer’s listed selling price of the vehicle is also likewise to be fixed.
The schedule of age-wise depreciation as shown below is applicable for the purpose of Total Loss/ Constructive Total Loss (TL/ CTL) claims only. A vehicle will be considered to be a CTL, where the aggregate cost of retrieval and / or repair of the vehicle subject to terms and conditions of the policy exceeds 75% of the IDV.
The depreciation for replacement of parts in partial loss claims will be as per a separate schedule specified under GR.9.”
Please refrain from quoting out of context and selectively.
Ramesh Jalan
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Er.P.Raju
Mr.P.L Sivakumar is correct
For Total loss / CTL,the depriciation to be applied as per GR8 depriciation schedule
Regards
P.Raju
Engineer / Surveyor
Tiruppur
Mobile:9843098580,9444545895
Kindly read the Motor Tariff GR8 & GR9 wordings
GR.8. Insured’s Declared Value (IDV)
The Insured’s Declared Value (IDV) of the vehicle will be deemed to be the ‘SUM INSURED’ for the purpose of this tariff and it will be fixed at the commencement of each policy period for each insured vehicle.
The IDV of the vehicle is to be fixed on the basis of manufacturer’s listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance /renewal and adjusted for depreciation (as per schedule specified below). The IDV of the side car(s) and / or accessories, if any, fitted to the vehicle but not included in the manufacturer’s listed selling price of the vehicle is also likewise to be fixed.
The schedule of age-wise depreciation as shown below is applicable for the purpose of Total Loss/ Constructive Total Loss (TL/ CTL) claims only. A vehicle will be considered to be a CTL, where the aggregate cost of retrieval and / or repair of the vehicle subject to terms and conditions of the policy exceeds 75% of the IDV.
The depreciation for replacement of parts in partial loss claims will be as per a separate schedule specified under GR.9.
SCHEDULE OF DEPRECIATION FOR ARRIVING AT IDV
|
AGE OF THE VEHICLE |
% OF DEPRECIATION FOR FIXING IDV |
|
Not exceeding 6 months |
5% |
|
Exceeding 6 months but not exceeding 1 year |
|
15% |
|
|
Exceeding 1 year but not exceeding 2 years |
20% |
|
Exceeding 2 years but not exceeding 3 years |
30% |
|
Exceeding 3 years but not exceeding 4 years |
40% |
|
Exceeding 4 years but not exceeding 5 years |
50% |
NOTE: IDV of vehicles beyond 5 years of age and of obsolete models of the vehicles ( i.e. models which the manufacturers have discontinued to manufacture) is to be determined on the basis of an understanding between the insurer and the insured.
For the purpose of TL/CTL claim settlement, this IDV will not change during the currency of the policy period in question. It is clearly understood that the liability of the insurer shall in no case exceed the IDV as specified in the policy schedule less the value of the wreck, in ‘as is where is’ condition.
GR.9. Depreciation on Parts for Partial Loss Claims
The following rates of depreciation shall apply for replacement of parts for partial loss claims in respect of all categories of vehicles / accessories.
|
1. |
Rate of depreciation for all rubber nylon/ plastic parts, tyres and tubes, batteries and air bags - |
50% |
|
2 |
Rate of depreciation for all fibre glass components - |
30% |
|
3. |
Rate of depreciation for all parts made of glass - |
Nil |
|
4. |
Rate of depreciation for all other parts including wooden parts is to be as per the following schedule |
|
:
|
AGE OF THE VEHICLE |
% OF DEPRECIATION
|
|
Not exceeding 6 months |
Nil
|
|
Exceeding 6 months but not exceeding 1 year |
5%
|
|
Exceeding 1 year but not exceeding 2 years |
10%
|
|
Exceeding 2 years but not exceeding 3 years |
15%
|
|
Exceeding 3 years but not exceeding 4 years |
25%
|
|
Exceeding 4 years but not exceeding 5 years |
35%
|
|
Exceeding 5 years but not exceeding 10 years |
40%
|
|
Exceeding 10 years |
50% |
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Mr S.K.Roy's reply is correct
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Thanking you,
Mahesh Sharma
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From:
M. SHARMA & COMPANY
Chtd.Engr, Insu. Surveyor & Loss Assessor, Govt. Regd. Valuer, Arbitrator
301/B, Navrang Complex, Nr. Hotel Utsav, Raopura, Baroda - 390 001
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P.Raju
Engineer / Surveyor
Mobile:9843098580,9444545895
Email:raju...@gmail.com
Vijay kumar Khandelwal-Indore(MP)
The guidelines for fixing IDV is for full value of vehicle (incl all
parts/fittings) which remains unchanged throughout
the policy period & can not be changed without consent of insured. On
this IDV insurance OD premium is charged
& it is treated as Sum Insured of vehicle accepted by insurer at the
commencement of policy.
In case of accident, during repairs, diff types of parts replaced
needs different rate of deprecition on these parts
as per age of vehicle for metal parts only. Battary, plastic, Rubber
parts are 50% dep. applicable at all times from 1st second of
commencement of policy. To avoid dispute, this guidelines for dep.
have been fixed & avoids dispute irrespective of use of vehicle
anywhere during policy period.
Pleae also note that aggragate cost of repair of vehicle (Parts
without dep. + Labour) when exceeds 75% of IDV,
it is considered a fit case of CTL. It is not the repair liability but
Total cost of repairs without dep. for CTL. Now it
comes the surveyor roll to present in such a manner to avoid dispute
in claim with maximum satisfaction to insured
& satisfaction of insurer. Dispute creates problems at insurer end
leads to Consumer forum case OR Court case &
I experienced that surveyor looses his fees & faith from that office,
though faith changes from office to office & also from Officer to
Officer. This is a country where people gives advance money or things
to Super Power God for fulfilling their
Wish & how they can remain away from claim officers.
I again quote here words of Ex CMD of NIC " All policies are for
giving Claims, underwriting is only incidental. "
It does not mean that we should obey insured or insurer but what ever
best from facts & papers suits to us
without deviating policy condition should be done in submitting the
claim report.
One officer told long back that A good surveyor is one who does not
bring dispute in office but solves at his
end only with maximum satisfaction to insured & satisfaction to
insurer within policy conditions. Be practical & use your own Vivek to
face the circumstances & if insured can not be tackled, leave this job
for insurer.
Thanks with regards
Vijay Khandelwal, Indore
09827010459
thesince
>
> Dear senior motor surveyors,
>
>
> For all rubber / nylon / plastic parts, tyres and tubes, batteries and air
> bags - 50 %
> For fiber glass components – 30 %
> For all parts made of glass – Nil
> Rate of depreciation for all other parts including wooden parts will be as per
> the following schedule
> Age of vehicle % depreciation
> Not exceeding 6 month ……………………………. Nil
> Exceeding 6 months but not exceeding 1 year 5%
> Exceeding 1 year but not exceeding 2 year 10%
> Exceeding 2 year but not exceeding 3 year 15%
> Exceeding 3 year but not exceeding 4 year 25%
> Exceeding 4 year but not exceeding 5 year 35%
> Exceeding 5 year but not exceeding 10 year 40%
> Exceeding 10 …………………………………. 50%
>
Rajan Nagane
Thanks for raising subtle issue that is important for most of the
Motor surveyors.
Understanding the policy wordings is always challenging to many
There are thus multitudes of interpretations as per areas & companies
and persons.
I think you are hinting at the more reasonable way to look at CTL
claims
The term "Aggregate Loss" needs to be understood
Is it the amount of net liability of Insurers or the amount of loss
that is equal to part cost & labor & towing recovering cost required
Are you implying at this thought that needs thinking & consensus
Other wise a knowledgeable person like you wont take up this point.
Er.P.Raju
In case of TL/CTL claims
The towing charges can be paid additionally on and above the IDV or the claim settlement with towing charges
will be restrict to the IDV.
Members views please
Regards
P.Raju
Surveyor
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