A Diwali Rocket Melts Your Bumper and Insurance Covers It, but Claiming Can Cost More Than Paying: Plastic Depreciation, NCB and the Rs.500 Rule (India 2026)

Short answer: if a firecracker burns or melts part of your car, a comprehensive policy covers it. Fire and explosion are both on the standard list of own-damage perils, and so is a "malicious act" if someone did it on purpose. A third-party-only policy pays nothing towards your own car. But "covered" is not the same as "worth claiming". Most firecracker damage lands on plastic parts and paint, which standard policies pay at a 50 per cent depreciation cut, and any own-damage claim resets your No Claim Bonus to zero. For a small burn, claiming can cost you more over the next five years than the repair itself.

Diwali falls on Sunday, 8 November this year, with Dhanteras on 6 November. That gives you about two weeks to open your policy schedule and find the four numbers that decide this, before you need them at midnight in a parking lot.

What the policy actually says

We read the private car package policy wording of two insurers, Tata AIG and Liberty General. On what is covered, the depreciation rates and the Rs.500 repair rule, the two are word-for-word the same. Both follow the structure of the former India Motor Tariff, which Liberty's wording still cites. Your insurer's wording will very likely match, but check it.

• What is covered. Section I (own damage) pays for loss or damage "by fire, explosion, self-ignition or lightning" and, separately, "by malicious act". A stray rocket is fire or explosion. Someone deliberately throwing a lit cracker at your car is a malicious act. Both are in.
• What is deducted. Payment is "subject to a deduction for depreciation" on parts replaced: 50 per cent for all rubber, nylon and plastic parts, 30 per cent for fibreglass, nil for glass, and an age-based rate for metal parts (nil under six months, rising to 50 per cent past ten years).
• Paint. Depreciation of 50 per cent applies to the material cost of painting. On a single consolidated paint bill, material is taken as 25 per cent of the total, so in practice you lose about 12.5 per cent of a paint bill.
• The Rs.500 rule. You may authorise repairs yourself only if the estimate "does not exceed Rs.500". Anything bigger waits for the insurer, who has a right to inspect the car.
• Police. Tata AIG's wording says that for theft or a "criminal act which may be the subject of a claim", the insured "shall give immediate notice to the police". A deliberate act falls under that.

There is also a compulsory deductible stated in your schedule, which comes off every own-damage claim. The amount varies, so read yours rather than assuming one.

Why firecracker damage is the expensive kind to claim

Think about where a rocket or a spinning chakri actually ends up on a parked car. On most modern cars the bumpers are plastic. So are the mirror housings, the grille, the wheel-arch liners and the scuttle panel under the wipers. A burn on the bonnet or roof is a paint job. All of those sit in the categories the policy pays at a cut.

Here is an illustrative bill to show the arithmetic. These are round numbers we chose to make the maths readable, not a quote for any car.

So on an Rs.11,500 repair, the insurer pays Rs.8,000 less the deductible. That looks worth having until you price the second cost, which does not show up on the repair bill at all.

The cost that arrives at renewal: your No Claim Bonus

The No Claim Bonus is a discount on the own-damage part of your premium for every consecutive claim-free year. The standard slab, as IndusInd General Insurance publishes it, is 20 per cent after one year, 25 after two, 35 after three, 45 after four and 50 per cent from five years on. The same page is plain about what a claim does: "In case of Own Damage claim, No Claim Bonus gets back to 0%." After that it climbs back up the same ladder, one year at a time.

We worked out how much discount you give up by claiming, compared with not claiming, across the renewals it takes to climb back to where you would have been:

Two assumptions sit under that table: the own-damage premium before discount stays the same each year, and you make no other claim. In real life it usually drifts down as the car's declared value falls, so treat these as upper estimates. The shape holds either way: a claim costs you somewhere around one year's own-damage premium in lost discount, spread over the following renewals.

Put that next to the bumper example. If your own-damage premium before discount is Rs.10,000 and you are on 35 per cent NCB, claiming the Rs.11,500 repair gets you Rs.8,000 less the deductible now, and costs you up to Rs.12,000 in lost discount later. Paying the Rs.11,500 yourself is cheaper. A burn that only needs paint, a few thousand rupees, is almost never worth claiming.

A simple rule for the night it happens

Claim only if what the insurer will pay, minus the deductible, is clearly more than one year's own-damage premium. You get the first number by asking the workshop to split the estimate into plastic parts, metal parts, labour and paint, then applying the depreciation rates above. The second is on your schedule.

Two things change the answer:

• A zero-depreciation add-on. It removes most of the depreciation cut, so the insurer pays close to the full bill. SBI General notes that the number of claims allowed under it "may be limited depending on your insurer and policy terms", so check how many you have left this year. It does not, on its own, protect your NCB.
• An NCB protection add-on, if your policy has one. Read its terms for how many claims it allows before the bonus is lost.

Big damage is a different story. If the fire spreads, if glass or a headlamp goes, or if the bill runs into lakhs, the insurance exists for exactly that, and you should claim without hesitating.

Before Diwali: four numbers to find on your schedule

1. Policy type. Comprehensive (package) or third-party only? If it is third-party only, nothing in this article helps you. Park carefully.
2. Your current NCB percentage. It is printed on the schedule.
3. The compulsory deductible, and any voluntary deductible you chose for a lower premium.
4. Add-ons. Zero depreciation, NCB protection, and any claim limits on each.

Save the insurer's claim number in your phone while you are at it. As the Business Today column on this question points out, most insurers want damage reported within a day or two.

On the night: what reduces the odds

• Park away from where people are lighting them. Open grounds, wide road junctions and building forecourts are where rockets get launched. A covered or enclosed spot beats a convenient one for these few nights.
• Close every window and the sunroof fully. A spark through a gap lands on seat fabric and carpet, which is a far bigger problem than a mark on the paint.
• Do not leave flammable things on display. Boxes of crackers, sanitiser bottles and aerosol cans belong in the house, not on the parcel shelf.
• Know what your dash cam will and will not do. Parking recording needs constant power. On 70mai cameras, for example, 70mai's own UP03 support page describes collision detection that wakes on "abnormal vibration" and saves a 30-second clip, plus motion detection and time-lapse modes. It also cuts power at 11.8 V to protect a 12 V battery. That only works through the 70mai UP03 hardwire kit (Rs.2,500), not the cigarette-lighter cable. A front camera also sees only what is in front of it. A rocket that hits the rear bumper is a job for a rear camera, which is why a dual-channel unit helps here. Our parking mode explainer covers the modes in detail, and the battery drain guide covers what overnight recording takes from the battery.

If it happens

1. Put out anything still burning, safely, and only then think about the car's paint. People first.
2. Photograph everything before anything is moved: the damage up close, the whole car, the surroundings, and any cracker debris lying near the car.
3. Save the dash cam clip before the loop overwrites it. Copy it off the card the same night. Our guide on preserving footage as evidence explains why the original file matters more than a WhatsApp forward.
4. Decide claim or no claim using the rule above, once you have a split estimate. You do not have to decide at midnight.
5. If you claim, tell the insurer quickly and do not start repairs above Rs.500 until the surveyor has seen the car.
6. If it was deliberate, report it to the police as well. The policy wording expects it, and footage that shows who did it is exactly what a police complaint needs.

If the damage is to an accessory we fitted, such as a dash cam, a fog lamp or a head unit, whether it is covered at all depends on whether it was declared on the policy. Our guide to insuring aftermarket accessories explains how that works.

Frequently asked questions

Does car insurance cover firecracker damage in India?

A comprehensive (package) policy does. Standard own-damage wording covers loss or damage by fire, explosion, self-ignition or lightning, and by malicious act. A third-party-only policy does not pay for damage to your own car.

Will a firecracker damage claim affect my No Claim Bonus?

Yes. Any own-damage claim normally resets the No Claim Bonus to zero at renewal, unless you have an NCB protection add-on that covers it. The bonus then rebuilds from 20 per cent after the next claim-free year.

Why does the insurer pay only half for a burnt bumper?

Standard policy wordings deduct 50 per cent depreciation on all rubber, nylon and plastic parts that are replaced, and most bumpers are plastic. A zero-depreciation add-on removes most of that deduction.

Should I claim for a small firecracker burn on my car?

Usually not. A small burn mostly needs paint, and the payout after depreciation and the deductible is often less than the No Claim Bonus you would lose over the next few renewals. Claim when the payout is clearly larger than about one year's own-damage premium.

Can I get my car repaired first and claim later?

Only for small jobs. Standard wording lets you authorise repairs yourself only when the estimate does not exceed Rs.500. For anything larger, inform the insurer and wait for the surveyor before repairs start.