Home / Car Insurance / Articles / Does Insurance Cover Your Vehicle’s Airbags?
Team AckoMar 1, 2023
Airbags are sophisticated tech that are saving lives all over the world. New laws are being implemented to ensure that even the smallest and most economical vehicles have a minimum number of airbags to ensure passenger safety.
It is important to note that once deployed, airbags have to be replaced; depending on how many airbags your vehicle has, that can end up being an expensive affair. You may assume that a standard insurance policy will cover the costs, but it is not so simple. If you are involved in an accident, you may wish to know whether the airbags that inflate have any coverage.
Insurance policies are complex to understand for the commoner and come with a lot of fine print. Let us first look at the basics of motor vehicle insurance policies to know how to get yourself adequately covered for all eventualities.
An airbag is essentially an air cushion designed to inflate the instant a collision is detected; and deflate just as quickly. The idea is to provide soft cushioning and restraint to the occupants of a vehicle during a crash, so that they don't end up hitting hard surfaces such as the windshield, the steering wheels or other body panels.
Thus reducing the chances of serious injuries. An airbag consists of a fabric bag which is flexible, an inflation module, and a sensor to detect impact. The airbag is designed to inflate in less than 30 milliseconds from when the sensor detects an impact.
Modern vehicles can have up to 10 airbags, even more if you own a safer car. These can get quite expensive to replace. Standard third-party insurance does not cover airbags. A comprehensive cover will cover up to 50 per cent of the value of the airbags.
You can get 100% coverage on airbags to replacement costs, but to do so, you need to understand the intricacies of Insurance policies which are explained below.
There are two types of motor vehicle insurance plans available in India.
Third-Party Insurance: As the name suggests, it is a type of insurance that provides financial coverage for damages caused by the insured person to another person or their property.
Third-party insurance is India's most common type of insurance coverage, and is the minimum legal requirement required to drive your vehicle in the country. Third-party insurance policies attract smaller premiums when compared to comprehensive insurance policies.
Comprehensive Insurance:Comprehensive car insurance is a type of insurance policy that offers more protection than a third-party insurance policy. Comprehensive coverage provides more protection for your car than just liability coverage, and can be used to reimburse you for damages to your vehicle in the event of an accident.
Comprehensive coverage includes collision, comprehensive and medical coverage, but it also has other types of damage, such as fire or theft. Comprehensive insurance policies attract higher premiums when compared to standard third-party insurance.
That being said, the benefits you get far exceed the extra you pay in premiums for this type of insurance.
A comprehensive insurance policy offers you much more financial protection than third-party insurance, but it still does not provide you with complete coverage. An excellent example of this is damage caused due to the wear and tear of the vehicle.
These gaps in coverage can be plugged in by opting for add-on covers. There are several add-ons available such as the Zero Depreciation Add-on, the Consumables Add-on, the Roadside Assistance Add-on and the Engine Protection Add-on, to name a few.
Each of these will cater to a different aspect and are worth looking at, if you own an expensive vehicle and want to cover all your bases financially.
If you own a new or expensive vehicle, opting for the additional add-on coverage is worth the extra money you pay in premiums. Airbags are covered under comprehensive insurance but not entirely due to their depreciation rates.
In the context of airbags, we first need to understand the concept of depreciation. Depreciation is essentially the loss of value of a vehicle as its components wear out over time.
Whenever you make a claim, the amount paid is always less than the vehicle's market value. This is because the final amount is calculated after deducting the depreciation. So, the older the car, the higher the deduction due to depreciation.
There are two types of deductions applicable when it comes to calculating the depreciation of a vehicle. One is based on the car's age, and the second is on the vehicle's various parts.
The percentage of depreciation based on the age of the vehicle is calculated as seen in the table below:
|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%|
The percentage of depreciation for various components is as follows:
|Component||Percentage of Depreciation Applied|
|Components made of nylon/rubber/plastics||50%|
|Components made of fibreglass||30%|
|Components made of glass||NIL|
As you can see, depending on the age of the vehicle and the type of component, you lose a lot when you make a claim. In the case of airbags specifically, you will lose 50% of the value of the airbag as they are made out of nylon, and more depending on the age of the vehicle. This is where the Zero-Depreciation cover saves the day.
A Zero-Depreciation cover is also known as a bumper-to-bumper cover or a nil depreciation cover. If you opt-in for this cover and file a claim, you are compensated for the total damage or loss without any deductions due to depreciation. Simply put, the value of depreciation of the damaged components will not be deducted from your claim amount. However, this is only applicable if the car's age is under 5 years.
A zero-dep cover is highly beneficial for the following scenarios:
You own an expensive or exotic car.
If you have just started driving.
You drive in accident-prone areas. This can include areas with higher probabilities of car accidents, or areas prone to accidents due to natural disasters such as rock falls, landslides, frequent flooding and so on.
If the spare parts for the make and model of your vehicle are expensive.
Accidents can happen at any time, and thanks to airbags, passenger safety has greatly improved in the event of a collision. With the government stepping in and making a minimum number of airbags compulsory in all vehicles, the cost of replacing them can get high if you are not covered adequately.
Comprehensive insurance will partially cover the costs of getting your airbag replaced. If you want complete coverage and do not want to spend anything out of your pocket to get them replaced, a Zero-dep cover is the way to go.
Zero-dep cover will eliminate deductions due to depreciation for all components of your vehicle apart from the tyres.
A no-claim bonus is an amount credited to the insured's account annually for not claiming the policy's term. For each year that a claim hasn't been filed, the bonus is calculated as follows: 20% for 1 year, 25% for 2 years, 35% for 3 years, 45% for 4 years and up to 50% if a claim hasn't been filed for the entire policy term of 5 years.
Airbags are made up of nylon. Based on the current table of depreciation rates set by the IRDAI, you will lose 50% of the replacement cost of each airbag. If you own an expensive vehicle equipped with many airbags, you can lose a significant amount of money if you don't opt for a zero-dep cover.
A zero-dep policy can be availed for a vehicle for up to 5 years. Few insurers may be willing to provide a zero-dep for cars older than 5 years.
There are a lot of factors that determine the premiums of your zero-dep cover:
Place of vehicle registration: The cost of premiums varies from city to city. They will be higher in Tier 1 cities when compared to Tier 2 or Tier 3 cities.
IDV of the vehicle: The more expensive the vehicle, the higher the IDV. Depreciation is calculated based on the car's current market price, which determines the premiums.
Additional Accessories: Premiums for optional extras are calculated separately.
Age of the vehicle.
Type of fuel the vehicle operates on: The type of fuel the car runs on also affects the premium. For example, vehicles that run on electricity and CNG have lower premiums when compared to those that run on petrol or diesel.
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