Claim Settlement (Partial Loss)
How a repairable own-damage claim is settled: what counts as a partial loss, depreciation on replaced parts, deductibles, the cashless route, when a licensed surveyor is required and the claim timelines in force today.
What a partial loss is
A partial loss is damage that can be repaired at a reasonable cost. Under the standard convention, a claim is a partial loss when the aggregate cost of retrieval and repair is not more than 75% of the IDV. Above that it is normally treated as a constructive total loss, subject to the policy terms.
It is the most common kind of motor claim, arising from accidents, vandalism, natural calamities and other insured perils.
How the payable amount is built
Insurance restores the owner's position; it does not improve it. A new part on a used vehicle is an improvement, so depreciation is deducted on replaced parts: 50% on rubber, nylon and plastic parts, tyres, tubes and batteries, 30% on fibreglass and nil on glass.
Metal parts are depreciated by vehicle age: nil up to 6 months, 5% up to 1 year, 10% up to 2 years, 15% up to 3 years, 25% up to 4 years, 35% up to 5 years, 40% up to 10 years and 50% beyond.
Depreciation applies only where a new part is fitted. Where a part is repaired, by dent removal or welding for instance, nothing is depreciated on the repair labour. Paint material is depreciated separately under the policy terms. The compulsory deductible and any voluntary deductible are then taken off.
Cashless and assessment
The cashless facility is available only at network garages empanelled by the insurer, which settles its share of the bill directly with the garage.
A motor loss above ₹50,000 must be assessed by a surveyor and loss assessor licensed by IRDAI, under section 64UM of the Insurance Act, 1938 and IRDAI's surveyor regulations. Smaller losses may be assessed by the insurer in other ways.
Timelines today
For retail policies, IRDAI's 2024 Master Circulars require a surveyor to be allocated within 24 hours of the claim being reported, the survey report within 15 days of allocation, and the insurer's decision within 7 days of receiving the report. Older material quotes 72 hours and 30 days.
Rules at a glance
Repair or replace
Harpreet and Sana, neighbours in Jaipur, each have a dented front door on cars four and a half years old. Harpreet's door is repaired by dent removal; Sana's is too badly creased and a new door is fitted.
Harpreet's claim carries no depreciation on the door, because no new part was fitted. Sana's new door is a metal part on a vehicle more than 4 but not more than 5 years old, so 35% of its price is deducted.
Settling a front-end repair
- Car 18 months old, under 1500 cc, no voluntary deductible. Bill, leaving painting aside: plastic bumper ₹8,000; windscreen glass ₹6,000; metal bonnet ₹12,000; labour ₹5,000; total ₹31,000.
- Bumper (plastic, 50%): ₹8,000 × 50% = ₹4,000 depreciation. Windscreen (glass): nil.
- Bonnet (metal, vehicle over 1 and up to 2 years, 10%): ₹12,000 × 10% = ₹1,200 depreciation.
- Labour: no depreciation. Total depreciation = ₹4,000 + ₹1,200 = ₹5,200.
- Assessed amount = ₹31,000 − ₹5,200 = ₹25,800. Less ₹1,000 compulsory deductible = ₹24,800.
Result. The insurer pays ₹24,800; the owner bears ₹6,200, being ₹5,200 of depreciation plus the ₹1,000 deductible.
Key points
- A partial loss is a repairable loss where retrieval and repair cost is not more than 75% of IDV.
- Depreciation applies to replaced parts only; repaired parts attract none.
- Rubber, nylon, plastic, tyres, tubes and batteries carry 50%, fibreglass 30%, glass nil; metal depends on vehicle age.
- Cashless settlement is available only at the insurer's network garages.
- A licensed surveyor is mandatory for a motor loss above ₹50,000.
Common misunderstandings
- Metal parts are not free of depreciation, as some older material says; only glass is nil at every age.
- Cashless does not mean the owner pays nothing; depreciation, deductibles and anything the policy excludes remain payable.
- A Zero Depreciation add-on removes the depreciation deduction on replaced parts, not deductibles or excluded items, and it carries the insurer's limits, usually on vehicle age and the number of claims in a year.
Questions people ask
A metal panel is replaced on an 18-month-old car. What is deducted?
10%, the metal-part rate for a vehicle more than 1 but not more than 2 years old.
Is a licensed surveyor needed for every claim?
No. It is mandatory when a motor loss exceeds ₹50,000; below that, the insurer may assess the loss in other ways.
Can a claim be refused because a document is missing?
The insurer may ask only for documents necessary for settlement, and no claim is to be rejected for want of documents.
What this lesson relies on
- India Motor Tariff — schedule of depreciation on replaced parts and compulsory deductible, as carried into the standard motor policy
- Insurance Act, 1938 — section 64UM, and the IRDAI surveyor and loss assessor regulations
- IRDAI Master Circular on General Insurance Business (11 June 2024)
- IRDAI Master Circular on Protection of Policyholders' Interests (5 September 2024)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.