Motor Insurance and Loss Assessment (Surveyor S-06)
This domain tests whether you can read a motor policy as a claims document: distinguish own-damage from third-party liability, apply IDV and depreciation correctly, and assess a loss the way an IRDAI-licensed motor surveyor must. Questions commonly test the Insurance Act 1938 Section 64UM, the IRDAI (Surveyors and Loss Assessors) Regulations 2015, and Indian Motor Tariff practice.
Own damage vs third-party liability
- Own damage (OD): the insurer indemnifies the insured's vehicle for accident, fire, theft, riot, natural calamity and transit perils. Policy excess (compulsory plus voluntary) and No Claim Bonus operate here.
- Third-party (TP): covers bodily injury and property damage caused to others. Liability for injury is unlimited (MACT awards); TP property damage is capped at ₹7.5 lakh. Policy excess does not apply to TP claims.
- Comprehensive = OD + TP under one policy; TP-only policies cannot pay OD repairs.
IDV and depreciation
IDV for a private car is the ex-showroom price less depreciation: 5% up to 6 months, 10% from 6–12 months, 15% 1–2 years, 20% 2–3 years, 30% 3–4 years, 40% 4–5 years and 50% beyond 5 years. Repairs follow the indemnity principle: plastic, rubber and glass parts attract tariff depreciation, labour is not depreciated, and betterment is charged when worn parts are replaced with new ones.
Worked example
A 3-year-old car with ex-showroom price ₹10,00,000 has IDV ₹8,00,000 (20% depreciation). Damage: parts ₹60,000, labour ₹40,000. Tyres with 50% wear are replaced, so betterment of ₹8,000 is recovered. A ₹1,000 compulsory excess and ₹3,000 voluntary excess apply, and towing is ₹2,000. Payable = ₹1,00,000 − ₹8,000 − ₹1,000 − ₹3,000 + ₹2,000 = ₹90,000, well within IDV and not a constructive total loss.
Traps that cost marks
- Settling a claim of ₹75,000 or more without a licensed surveyor's report.
- Applying policy excess to a third-party claim.
- Depreciating labour or charging betterment on it.
- In constructive total loss, computing repair cost against IDV without deducting salvage.
- Accepting an IDV outside the depreciation slabs without recording justification.