Replacing airbags can be expensive. It's not entirely covered under insurance due to depreciation rates. You lose out upto 50% value on airbags made of nylon. Read on to understand how you can get maximum value covered under insurance.
Are vehicle airbags covered under car insurance?
Airbags refer to cushions in a car that inflate in case of collision. Over the years, airbags have saved thousands of lives due to which new laws are being implemented to have a minimum number of airbags installed in a vehicle to prevent the passengers and the vehicle driver.
Airbags protect the passenger from getting injured due to the vehicle’s interior, thus preventing injuries. Today, even the most economical vehicles plying on Indian roads feature airbags to provide maximum protection to the vehicle owner and passengers.
In a vehicle, airbags are installed in various places including front airbags which are deployed near the steering wheel, side airbags installed on the backseat of the car and knee airbags installed down the dashboard.
Airbags once inflated need to be replaced. You might think that having comprehensive car insurance can help you get coverage for airbags, but it is not that simple. Read on to know if airbags are covered under car insurance or not.
Does a car insurance policy cover airbags?
As you know car insurance is of two types in India i.e. third party car insurance and comprehensive car insurance. A third party policy protects against damages caused to third party persons or property. Whereas, comprehensive policy provides coverage against damages caused to your own car that of the third party.
Having a comprehensive car policy protects you against damages caused due to your own car due to natural or man made calamity like fire, flood, cyclone, earthquake, etc.; it also provides protection against theft. Today, most of the cars have 10 airbags to ensure optimum security of the vehicle owner.
The cost of replacing the airbags can turn out to be very expensive. Moreover, in luxurious cars too, the cost of replacing the airbags can cost a heavy out of pocket expense for the car owner. A third party insurance policy does not provide coverage for airbags.
However, a standard comprehensive policy does, but only up to a certain extent. This is because a comprehensive car policy excludes the cost of normal wear and tear of the vehicle, also known as depreciation. Thus, to get coverage for airbags, you need to extend the car insurance coverage with additional riders like zero depreciation.
How depreciation impacts your car insurance claim?
In general, airbags are covered under comprehensive car policy, but not entirely due to their depreciation rates. On the other hand, depreciation refers to the value of the vehicle depreciation due to its components wearing out over a period of time.
Under a car policy, when you make a claim, the amount paid is always less than the vehicle’s market value due to the depreciation factor. Older the car, the higher the depreciation. The value of depreciation is calculated based on the vehicle parts and its age.
Depreciation rates based on vehicle’s age
| Age of the Vehicle | Percentage of Depreciation Applied |
|---|---|
| Up to 6 months | 5% |
| 6 months to less than a year | 15% |
| 1 year to 2 years | 20% |
| 2 years to 3 years | 30% |
| 3 years to 4 years | 40% |
| 4 years to 5 years | 50% |
Depreciation rates based on vehicle parts
| Component | Percentage of Depreciation Applied |
|---|---|
| Paintwork | 50% |
| Components made of nylon/rubber/plastics | 50% |
| Components made of fiberglass | 30% |
| Components made of glass | NIL |
As you see, due to the depreciation factor, you will lose out on 50% of the airbags value that is specifically made up of nylon. The depreciation amount will increase depending on the vehicle’s age as well. This is when zero depreciation add on comes to your rescue as it offers full coverage without factoring in the depreciation value.
Buying a zero depreciation cover is highly beneficial in case of the below:
- You have just started driving
- You own an expensive car
- Your car is a new one
- The spare parts of your car are expensive
- You drive in accident prone areas
The Road Transport and Highways Ministry has made it mandatory for all vehicle owners to have at least 6 airbags installed in the vehicle. Hence, it is important that you purchase a zero depreciation add-on cover with other add-on covers with your car policy to get extensive coverage and not end up spending for the expensive airbags costs out of your pocket.
