When buying or renewing car insurance, one of the most confusing parts is deciding your IDV (Insured Declared Value).
Set it too high, and you’ll pay extra premium. Set it too low, and your claim payout may fall short. So, how do you find the right balance?
This guide breaks down how IDV impacts your premium, how insurers calculate it for your Hyderabad RTO, and how you can adjust it for better savings without compromising on coverage.
By the end of this article, you’ll know exactly what IDV to pick for your vehicle and how to make sure you’re not overpaying for your car insurance policy.
WHAT IS IDV IN CAR INSURANCE
IDV (Insured Declared Value) is the maximum amount your insurer will pay if your car is stolen or declared a total loss after an accident.
It’s basically your car’s current market value, calculated using the manufacturer’s selling price minus depreciation for age and wear.
Typical depreciation chart used by insurers:
Your IDV affects not only your coverage amount but also your premium.
| Vehicle Age |
Depreciation on Value |
| 0–6 months |
5% |
| 6 months – 1 year |
15% |
| 1–2 years |
20% |
| 2–3 years |
30% |
| 3–4 years |
40% |
| 4–5 years |
50% |
Higher IDV = higher coverage + higher premium.
Lower IDV = lower premium but smaller payout during claim.
How Idv Impacts Your Premium
- Direct link: Premium is calculated as a percentage of IDV, typically 2–3% of the car’s market value.
- Higher IDV = higher premium: The insurer covers more risk, so the cost goes up.
- Lower IDV = lower premium: You’ll pay less but might lose protection if your car is totaled.
- Balanced IDV: Setting it close to resale or market value gives the best protection-to-cost ratio.
Example:
If your car’s market value in Hyderabad is ₹6,00,000
How To Set The Right Idv
- Check RTO-based resale value: Use your Hyderabad RTO data or the car insurance calculator.
- Review your insurer’s recommended IDV range: Usually ±10–15% variation allowed.
- Consider depreciation manually: For older cars (>5 years), IDV is agreed upon between you and the insurer.
- Balance protection and affordability: Avoid extreme highs or lows.
- Use comparison tools: PolicyBachat automatically shows IDV differences across insurers.
Common Mistakes Car Owners Make
- Undervaluing IDV to save premium: Leads to reduced claim payout during theft or total loss.
- Overvaluing IDV: Paying higher premium for coverage you may never use.
- Ignoring depreciation: Not checking how much the car’s value has dropped.
- Skipping comparison: Assuming all insurers use the same IDV calculation (they don’t).
- Renewing blindly: Letting system default choose IDV without manual check.
Localized Section For Hyderabad
| Car Segment |
Avg. Market Value (₹) |
Typical IDV Range (₹) |
Suggested IDV (₹) |
| Hatchback |
₹3,00,000–₹5,00,000 |
₹2,40,000–₹4,20,000 |
₹3,50,000 |
| Sedan |
₹6,00,000–₹9,00,000 |
₹4,80,000–₹7,50,000 |
₹6,80,000 |
| SUV |
₹10,00,000–₹18,00,000 |
₹8,00,000–₹15,00,000 |
₹12,50,000 |
Pro Tip Section
- Always review IDV annually - depreciation adds up fast.
- Never reduce IDV more than 15% below market value.
- Keep your IDV consistent across renewals to avoid coverage dips.
- If your car is financed, check loan documents - banks often insist on higher IDV.
FAQs
What is IDV in simple terms?
It’s your car’s current value used by insurers to calculate both coverage and premium.
Who decides my IDV?
Insurers suggest a range, but you can adjust it within limits.
Does lowering IDV reduce premium?
Yes, but it also reduces claim payout for total loss or theft.
Is IDV fixed by IRDAI?
No, IRDAI provides guidelines, but insurers calculate it using standard depreciation tables.
Can I increase IDV during renewal?
Yes, slightly - within ±10–15% allowed range.
Does city or RTO affect IDV?
Yes, prices vary depending on regional resale and claim data.
What happens if my IDV is too low?
You’ll receive less during a total-loss claim, even if repair cost is higher.
Is higher IDV always better?
Not necessarily - balance between coverage and affordable premium is key.
Can I set IDV manually?
Yes, for older cars (>5 years), IDV is mutually agreed between you and insurer.
How can I check correct IDV for my car?
Use PolicyBachat’s calculator or check your last renewal summary.
Customer Reviews
- “I used to understate IDV. This blog showed how much I was losing.” - Neha K., Pune
- “Finally understand why my premium changed after renewal.” - Arjun M., Hyderabad
- “Used the calculator, set IDV right, and saved ₹1,200.” - Vikram R., Delhi
- “Explained IDV better than any insurer ever did.” - Sneha D., Bengaluru
- “After reading, I adjusted my IDV by 10% and got balanced coverage.” - Rajeev T., Mumbai
- “Now I explain IDV to others - it’s that clear!” - Priya S., Chennai