How Does IDV Value is Calculated?

How Does IDV Value Is Calculated?

Insured Declared Value (IDV) represents the maximum sum assured for a vehicle. It is calculated by subtracting the depreciation from the manufacturer’s listed selling price. The depreciation percentage increases as the vehicle ages, starting at 5% for new cars. Accessories not fitted by the factory are calculated separately with additional depreciation. This value determines the compensation in case of total loss or theft. It does not include registration or insurance costs.

What IDV Value To Choose While Taking Insurance?

You should choose an IDV that closely matches the current market value of your vehicle. Setting it too low reduces your premium but results in a lower payout during a total loss claim. Conversely, an excessively high IDV increases the premium without providing extra benefit. IRDAI provides a depreciation schedule based on the vehicle's age to help fix this value. Always balance the premium cost with adequate protection.

What Happens When IDV Value Change In Car Insurance?

IDV (Insured Declared Value) is the maximum amount that an insurance company will pay to the policyholder in case of a total loss or theft of the insured vehicle. When the IDV value changes, it directly affects the premium amount of the car insurance policy. A higher IDV will attract a higher premium, while a lower IDV will result in a lower premium. If the policyholder requests a change in the IDV value during the policy term, the premium amount will be adjusted accordingly. It is important to note that the IDV value should be accurately calculated based on the market value of the vehicle to ensure adequate coverage. A higher IDV can result in a higher payout in case of a total loss, while a lower IDV can result in insufficient compensation.

How is Idv Value Calculated?

Insured Declared Value (IDV) is the maximum sum assured fixed by the insurer for motor insurance. It is calculated by subtracting the depreciation from the manufacturer’s listed ex-showroom price of the vehicle. For any non-factory fitted accessories, their value is added before applying the age-based depreciation. The depreciation rate ranges from 5% for new vehicles to 50% for those aged five years. This value represents the compensation provided in case of total loss or theft.

How to Check IDV Value of Car?

When you are buying a car, you might want to check the IDV value of the car. This is a common question that many people have when they are buying or selling a car. The maximum liability of the insurance company in case of loss or damage would not exceed the IDV mentioned in the policy. The IDV would decrease each year at the time of renewal due to the depreciation factor which is taken into consideration by the insurance company for premium computation.