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# IDV- Insured Declared Value

## IDV- Insured Declared Value

While taking a policy, we often get intimidated by unknown terms and do not delve further into the subject. In matters like insurance, we must understand the technical jargon so that we can make informed decisions.

One such technical term is IDV. IDV means ‘Insured Declared Value. The IDV is one of the essential aspects of a vehicle insurance policy. The IDV of the car or IDV of the bike is the basis of premium rates and coverage.

## What Is IDV?

For starters, IDV is the monetary value of a bike or car fixed by the insurer when taking the policy. Your insurer will decide the coverage amount according to the IDV. Insured Declared Value will also be used to calculate your premium rate. In the event of a claim, the compensation amount will be decided based on the IDV and will never be higher than the IDV. IDV changes during yearly renewal due to depreciation.

## Importance of IDV

IDV Value is the deciding factor in car and bike Insurance. The amount for the premium will be proportionate to the IDV value of your car or bike. Higher the IDV, higher the premium, or vice-a-versa. But we highly recommend not to undervalue your car or bike because, in case of damage, you will get compensation as per the IDV. You will be liable to get the highest value of IDV only when your car or bike gets stolen or in case of irreparable damage.

## IDV Calculator

The Vehicle IDV Calculator is an online tool that estimates the market value of your car or bike and calculates a probable premium amount you should be paying. The IDV Calculator for car/bike will give you an idea of your compensation in case of total damage or theft.

With Accessories:

IDV = (Manufacturer’s Selling Price – Depreciation Cost) + (Accessories Cost – Depreciation of These Accessories).

Without Accessories:

If you have not added any accessories to your car, then the formula is:

IDV = Manufacturer’s Selling Price – Depreciation Cost.

## How is the Cost of Depreciation Calculated?

The age and the wear and tear of the vehicle and accessories will be taken into account while calculating depreciation. All car and bike owners should be aware of the rate of depreciation for fixing the IDV. The depreciation percentage can vary from 5% for a one-year-old car to 50% for a five-year-old vehicle.

Note: For vehicles more than five years old, depreciation is not considered while fixing the IDV.

## Factors That Affect the IDV of Your Vehicle

The lifespan of a car or bike:  The IDV Value will be determined based on how old your car is. The market value of a vehicle goes down with the age of the car or bike.

Manufacturer Make and Model:  The car company, make and model all three influence the IDV.

Registration Details: The city/town where your car is registered also determines the Insured Declared Value (IDV). The IDV is lesser in metro cities compared to 2 or 3 tier cities. The IDV of your vehicle in Mumbai may be less than its IDV in Thane.

Standard Depreciation (As per Indian Motor Tariff): The second you drive out of the showroom, the value of your car or bike starts depreciating. The percentage of depreciation added to IDV increases with each passing year.

Accessories: Accessories added to the car or bike are included in depreciation calculations. The age and working condition of accessories will be considered while calculating IDV.

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