Saturday 9 March 2013

Depreciation on Painting Charges: Applicable from 01 February 2013


The IRDA has issued a notification (IRDA/NL/ORD/MISC/006/01/2013, dated 08th January 2013) partially modifying the “GR-9: Depreciation on Parts of Partial Loss Claims” of the erstwhile India Motor Tariff.  

Prior to this modification, the India Motor Tariff treated the material cost of painting charges as labour charge. With the revised version, the total labour charges need to be bifurcated into Cost of Paint and Labour Charge Proper.

The modified “GR-9: Depreciation on Parts of Partial Loss Claims” now has a subsection 5 incorporating depreciation on Painting Charges and it reads:

“5. Rate of Depreciation for Painting: In the case of painting, the depreciation rate of 50% shall be applied only on the material cost of total painting charges. In case of a consolidated bill for painting charges, the material component shall be considered as 25% of total painting charges for the purpose of applying the depreciation”

The above changes shall be applicable to all Motor Package Policies whose risk inception date fall on or after 01 February 2013.

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