What is depreciation in commercial vehicle insurance?
The value of a vehicle decreases by a certain percentage after every passing year. This gradual reduction in the value of the vehicle is known as depreciation. In case of a claim, the insurance company offers compensation based on the depreciated value of the automobile. In case of repairs, the insurer will provide compensation based on the depreciated value of the parts that need replacement. In case of a total loss, the insurance company will provide the IDV of the vehicle which is the vehicle’s ex-showroom price minus depreciation.