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Questions and Answers
What was the estimated cost of the damage to the front part of the car?
What was the estimated cost of the damage to the front part of the car?
When did the accident occur?
When did the accident occur?
What is being calculated in the example?
What is being calculated in the example?
What type of loss is assumed in the example?
What type of loss is assumed in the example?
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What is the insurance company deciding to do in the example?
What is the insurance company deciding to do in the example?
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Study Notes
Partial Loss
- For missing or damaged spare parts, depreciation percentage is applied based on vehicle age:
- Less than one year: 5% deduction
- One year to less than two years: 10% deduction
- Two years to less than three years: 15% deduction
- Three years to less than four years: 20% deduction
- Four years to less than five years: 25% deduction
- Five years and above: 30% deduction
- For tires, deduction rate is 25% for each year or part of its life, up to a maximum of 50% of the value of replacing it with a new one.
- The condition of consumption does not apply to the front and rear glass or door glass.
Total Loss
- Company's liability will not exceed the lesser of the following amounts:
- Estimated value of the vehicle by the insured, with a deduction of 2% for each month or part thereof that has elapsed since the commencement of insurance under the policy.
- Conservation, transportation, and treatment expenses: the company will cover the reasonable cost of transporting a damaged vehicle to a safe place or repair shop, as well as appropriate emergency medical expenses within the limits of the treatment expenses shown in the policy table.
Example of Total Loss
- A person insured his car model 2014 with an insurance company for an amount of 75000 riyals and a premium of 3% for the period from 2018/1/1 to 2018/12/31.
- Accident occurred to the car on 2018/7/5 resulting in a loss that was detailed as follows:
- Damage to the front part of the car estimated at 10000 riyals.
- If the loss was total, the compensation value would be calculated based on the insurance amount.
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Description
Quiz about depreciation rules for missing or damaged spare parts, including replacement and cash compensation.
