IDV in bike insurance

A complete guide to understanding IDV in two-wheeler insurance, and how it impacts the bike insurance premium and coverage.
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3 mins
20-August-2023

When it comes to bike insurance, the Insured Declared Value (IDV) plays a crucial role. The IDV determines the maximum amount that you can claim in case of theft or total loss of your bike due to an accident. In this article, we will discuss everything you need to know about IDV in bike insurance. Know its significance, how to calculate it, and the factors that determine it.

What is IDV in bike insurance?

IDV stands for Insured Declared Value, which is the maximum amount that an insurance company will pay out for total loss of your two-wheeler. IDV is the current market value of your bike, which includes the manufacturer's price and the cost of any accessories added to it. The IDV is calculated based on the depreciation value of the motorcycle every year, which means the longer you own your motorcycle, the lower the IDV.

How to calculate IDV of two-wheeler?

Use the IDV calculator online to determine the insured declared value of your bike. The formula for calculating the IDV of your two-wheeler is as follows:

IDV = (Manufactured year of the bike x actual market value - depreciation value)

Actual market value is the amount that you can sell the bike for in the current market. Depreciation value is the amount by which your bike's value decreases every year. The percentage of depreciation varies with the age of the bike and predetermined by the insurance company.

Factors that determine your two-wheeler's IDV

The IDV of your two-wheeler depends on several factors, including:

The age of the bike: The older your bike, the lower id its IDV, as it depreciates over time.

The model and make of the bike: Certain brands and models are more expensive than others, and these factors affect the IDV of your bike.

Used or new model: The IDV for a used bike will be lower than that of a new bike.

State of your two-wheeler: The condition of your bike can also affect its IDV.

How does IDV impact your two-wheeler insurance?

IDV directly affects your two-wheeler insurance premium. The higher the IDV, the higher your premium. An insurance company will offer a lower premium for a lower IDV. Also, this will proportionately affect your coverage amount.

What happens if you choose a lower IDV for your bike?

While it may seem tempting to go for a lower IDV to save money on premium, it may end up costing you more in the long run. If you opt for a lower IDV, you will receive a lesser pay out in case of theft or damage to your bike in an accident. Therefore, it is essential to choose a reasonable IDV that accurately reflects the current market value of your two-wheeler.

What happens if you choose a higher IDV for your bike?

Choosing a higher IDV might increase your premium, but it ensures that you receive reasonable compensation in case of bike theft or total loss. However, it is important not to choose an excessively high IDV as it might still cause you to pay a higher premium than necessary.

IDV plays a prominent role in determining the pay out that you receive in case of theft or damage to your two-wheeler. It is important to calculate the IDV accurately and choose an appropriate value that reflects the current market value of your two-wheeler. This will ensure that you receive adequate compensation in case of unfortunate events and not spend more on your insurance premium than necessary.

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