Car insurance: How much flood damage will regular comprehensive car insurance cover?

The torrential downpour in Bengaluru flooded thoroughfares, swanky apartment complexes and homes. General insurance companies have already started receiving notices of claims for vehicle damage from the flood.

If your vehicle has been damaged or submerged due to flooding, here’s what you need to know about what is covered by an all-risk auto insurance policy and the claims process.

A regular comprehensive auto insurance policy without any add-ons like engine protection endorsement, only covers losses caused by natural calamities such as cyclones, lightning, earthquakes, landslides, floods , hurricanes, storms, typhoons and floods. Any consequential loss due to a natural disaster is not covered. For example, a car engine failure due to water entering the engine is considered a consequential loss.

Extent of damage to the car due to flooding
A car can be submerged up to the level of the bumper or up to the dashboard or up to the roof in the event of flooding. If the water reaches the level of your car’s bumper, the damage will be minimal. it could be repaired by a mechanic without too much hassle. If the car is submerged up to the dashboard or roof, you will need to call the insurance company immediately and inform them of the details of the damage. In either case, the vehicle’s engine, electronic control module (ECM), upholstery, electronics and all lights could be damaged, said Susheel Tejuja, Principal, Founder and Managing Director of

What should an owner do if their car has been submerged?
“Do not start the vehicle after the flood waters have receded as it may damage the engine,” said Nitin Deo, technical manager of Edelweiss General Insurance.

Automobile insurance policyholders must provide the relevant documents to the insurer for the claims process. So, click several photos or videos of your submerged car and keep them handy, suggest insurance companies. You must submit detailed photos of the vehicle to show the extent of the damage.

What proportion of the damage will your comprehensive car insurance policy cover?
If you have a regular comprehensive auto insurance policy, every part of the vehicle will be covered by it, Deo said. However, this is subject to the exclusions and conditions mentioned in the automobile insurance policy. For example, the standard comprehensive policy does not cover engine failures due to waterlogging, as they are considered consequential losses, according to Animesh Das, senior manager, Motor Underwriting at ACKO.

In the event of flood damage, insurance companies generally provide coverage for two scenarios: a)

The car is washed away b) The car has been affected by water infiltration in which water enters the

parts and/or the interior of the vehicle, thus causing damage, explained the experts.

“Compensation depends on the condition of the old car and the years of use,” Das said.

“If the cost of the repair exceeds 75% of the insured declared value (IDV) of the vehicle, it will be

designated as a total loss as stated in the policy,” Tejuja explained.

The Insured Declared Value or IDV for a new car is 95% of the show price of

the car, 80% for a one-year-old car, 70% for a two-year-old car, 60% for a three-year-old car.

one-year car, and so on, according to a standard table. The value of the car depreciates by about 10%

every year.

In case of total damage, the insurance company will normally follow a standard deduction policy – Rs 1,000 if the car is under 1,500 CC (like Swift, i20 etc.) and Rs 2,000 if the car is over 1500 CC (such as XUV, Innova, etc.). This deduction is called the “standard deductible” and is mentioned on each policy. Thus, the customer gets IDV minus – standard deductible for the total damage.

If your car is partially damaged and the repair cost is between 60 and 75 percent of the IDV, the claim will be settled on a cash loss basis, Tejuja explained. In the event of damage to individual parts of a car (but not total damage or theft of a car), the amount of settlement depends on which parts are damaged.

In such cases, insurance companies will pay 60-70% of the repair cost, but this percentage is not fixed, experts say. The insurer and the insured mutually decide how much to pay before repairing the vehicle, they added. Note that the amount will depend on the age of the car, its condition as well as your negotiating skills.

“If the cost of the repair is less than 60% of the IDV, the amount of the claim will be calculated based on the age of the vehicle and the depreciation applied to the parts,” Tejuja said.

In case of upholstery, lights or any other parts pre-installed in the cars, are damaged due to

floods, the customer should pay the amount of depreciation of the cost of the car part or component, said


Why the car owner has to pay depreciation
All-risk car insurance normally only reimburses the actual market value or depreciated value of any part. For example, a 4-year-old car would have a much lower market value than a new car, i.e. its value would have depreciated. This concept would also apply to auto parts. Therefore, the insurance company is only required to pay you the depreciated value of any car part that needs to be replaced due to damage subject to the policy exclusions.


“For metal parts, the depreciation will depend on the age of the vehicle. For example, 10% for a vehicle less than two years old, 15% for a vehicle between two and three years old, and the same. For cars older than 10 years, an insurance company can deduct up to 50% of the depreciation.

plastic parts are subject to 50% depreciation,” Deo said.

“In the event of significant damage, the customer receives the amount of the claim less the depreciation of the parts.

Although the depreciation depends on the damaged parts, the customer basically has to pay

about 25-30% of his pocket,” Das added.

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