Idv in Car Insurance

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All about IDV in Car Insurance
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What is Insured Declared Value (IDV) in Car
Insurance?

• IDV or Insured Declared Value is the supposed
  current market value of a car.
• It is the maximum sum insured that your insurer
  can provide you in case of theft or total loss of
  the vehicle.
• The market value of the car is decided by your
  insurer on the basis of ex- showroom price minus
  the depreciation.
• In simple terms, IDV is an amount that you can
  claim for if your car is stolen or is damaged
  beyond repair.

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Why is Insured Declared Value Important?

• The Insured Declared Value of a vehicle plays an
  important role in premium calculation.
• IDV is imperative in calculation of own damage
  part of the premium. This portion of the premium
  is up to 2-4 of the IDV, basis the age and cubic
  capacity of the vehicle.
• The greater the IDV, the higher is the premium.
• Less the IDV, lesser is the premium

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Depreciation Schedule of IDV in Car Insurance
Age of the vehicle Depreciation for deriving IDV
Not exceeding 6 months 5
Exceeding 6 months but not exceeding 1 year 15
Exceeding 1 year but not exceeding 2 years 20
Exceeding 2 years but not exceeding 3 years 30
Exceeding 3 years but not exceeding 4 years 40
Exceeding 4 years but not exceeding 5 years 50
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Note Beyond 5 years, the IDV of the car is
determined on the basis of understanding between
the insurance company and policyholder.
The Manufacturer
Car Model
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Factors that Insurance Company Considers While
Calculating the IDV of a Car

• Age of your car
• Ex-showroom price
• Brand and model of the car
• Car registration details
• City where the vehicle is registered
• Details on the registration certificate
• Registration type- private or commercial
• Manufacturer, make and model of the vehicle
• Cubic capacity
• IDV Formula Ex-show room price1- (depreciation
  percentage)

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When does an Insurance Company Compensate IDV?
A policyholder can claim for IDV in these
scenarios
Constructive Total Loss
Total loss of the vehicle
Your Car is stolen
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Choosing an IDV for your car
What Happens If You Declare a High IDV?
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How much IDV to declare?

• Get an IDV that is close to the market value of
  your car.
• Decreasing the IDV value will result in lower
  premium and low coverage.
• Increasing the IDV value of your car will result
  in high premium.
• As your car grows older, the IDV decreases as it
  is.

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