What is IDV in Car Insurance and how is it calculated?
Car insurance customers might have a fair idea of the coverage and the Sum Insured given in their car insurance policy. The sum insured in the car insurance policy is known as Insured Declared Value (IDV). IDV can be described as the value of the car agreed by the customer and the insurance company prior to the issuance of the car insurance policy. The liability of the insurance company in any case doesn’t exceed the Insured Declared Value present in the car insurance policy.
The IDV as it is called Insured Declared Value is the value declared and agreed by the insured of the car and the premium is determined based upon the IDV selected in the car insurance policy. The IDV value of the car is to be chosen by the customer and agreed before the inception of the policy.
The IDV is different for different make model of the vehicles and is depreciated each year taking into consideration the depreciation of the vehicle due to usage, wear and tear. Let us understand how to calculate IDV and the IDV depreciation table for the car insurance.
1. IDV Calculator & Table
The Insured Declared Value is calculated each year before the start of the car insurance policy. The IDV for the new car is taken as the 95% of the ex-showroom price of the car and the premium is calculated accordingly.
IDV for new car = 95% * Ex-showroom price
The IDV is then depreciated each year due to the usage, wear and tear of the car and after 5 years the IDV of the vehicle is mutually agreed between the customer and the insurance company. The IDV can also be considered as the market value of the car, in some exceptional cases where the car is maintained well the market value of the car could be far greater than the IDV value mentioned in the car insurance policy copy. Here is the table basis on which the IDV for your car is calculated each year.
|Age of the Car
|6 months and Below
|More than 6 months and less than 1 year
|1 year to 2 years
|2 years to 3 years
|3 years to 4 years
|4 years to 5 years
For example, if you have purchased a brand new car with Ex-showroom price of Rs.10Lacs then the IDV for the first year would be 95% of the ex-showroom price which is Rs.9.5Lacs. At the time of first renewal the IDV would be 80% of the ex-showroom price and so on. The IDV of the car can be calculated using this table and the IDV for each can be arrived before deciding on the premium.
The IDV calculation for new car and used car can be done with the help of the below link: https://idv.gicouncil.in/. Check your car IDV with the help of this link. It is the IDV calculation link provided by the GGI Council of India to provide the common people with access to the IDV they are eligible for their car.
2. Importance of Higher IDV
The IDV value of the car can be calculated using the above link and table and the highest and lowest IDV available to your car model can be known from the insurance company. Higher the IDV, higher would be the premium. Likewise Lower the IDV, lower would be the premium. The IDV is to be selected carefully by the insured taking into the premium payment capacity of the insured.
Insured declared value plays an important role at the time of claim settlement in total loss/ constructive total loss cases. The higher the IDV, higher would be the claim amount in case of total loss cases. Since the claims in car insurance are paid on the basis of your IDV it is highly important to strike a balance between the IDV and the premium to be paid.
Visit www.policybachat.com to calculate the IDV of your car and get the best car insurance with the maximum IDV. The IDV of your car can be increased by choosing the insurance company which gives the maximum IDV to your car make and model.