IDV Calculation: How IDV is Calculated in Two Wheeler Insurance

Over time, the value of two-wheelers keeps on reducing due to depreciation. To get the correct amount of claim for its insurance, you should know about its market value. For this, the understanding of Insured Declared Value (IDV) is crucial as it denotes how much compensation you are eligible to receive for your two-wheeler against its repair or replacement expenses. It also means that finding the right IDV while purchasing an insurance policy holds a high significance.

What Is Insured Declared Value (IDV)?

The Insured Declared Value (IDV) is equal to the sum assured amount that the insured person gets in case his or her two-wheeler gets stolen or suffers a total loss. It is the existing market value of the two-wheeler after deducting the depreciation amount and bike registration cost which helps in determining the right claim settlement amount.

How to Calculate Insured Declared Value (IDV) in Bike Insurance?

Insured Declared Value is derived after deducting the cost of depreciation from the selling price of the manufacturers along with the cost of accessories after deducting their depreciation. However, the IDV calculation of the accessories of your two-wheeler which are not company fitted is done separately by paying an additional cost. Here is the formula to simplify the calculation of IDV:

Insured Declared Value = (Company’s listed selling price – depreciation value) + (Cost of bike’s accessories excluded from the listed selling price – depreciation value of accessories).

The depreciation applicable in the calculation is based on the table given below:

Age of the Two-Wheeler

Depreciation Rate

Less than 6 months


More than 6 months but less than 1 year


More than 1 year but less than 2 years


More than 2 years but less than 3 year


More than 3 years but less than 4 year


More than 4 years but less than 5 year


However, if the age of the bike is more than 5 years, its IDV is determined on the basis of its serviceable condition and the state of its body parts. In case of different components made of different materials, the IDV value is adjusted accordingly, and the two-wheeler's final IDV is determined as an overall average. Although, in case of old vehicles, the IDV is also determined by mutual agreement between the insurance provider and the insured person. Even some insurance firms call surveyors to reckon the right IDV, which may result in additional cost that has to be borne by the insured.

Factors Determining the Insured Declared Value (IDV)

Some factors affect the Insured Declared Value (IDV) of two-wheeler vehicles, which are as follow:

  • Age of bike
  • Fuel type
  • RTO location
  • Make and Model type
  • Registration date of bike
  • Policy term of bike insurance


Insured Declared Value (IDV) determines the correct market value of your bike and refers to the maximum claim amount your insurer could pay you off in case of an accident or a mishap. Hence, it is important to understand the calculation of the right IDV with the above mentioned methods. Also, IDV is directly proportional to the premium amount of insurance policy, hence, you should select an IDV for your two-wheeler by comparing quotes from different insurers to get the right policy as per your budgets and requirements.

Also Read:

Know About IDV and NCB in Two Wheeler Insurance

Best Two Wheeler Insurance Plans in India

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Add-on Covers For Your Bike Insurance Policy

  • Zero Depreciation

    Like other assets, the value of your two wheeler also depreciates constantly with time and the liability of this expense by default rests with the policyholder. A zero depreciation add-on protects you against the depreciation expenses incurred by your bike. Thus, if you opt for a zero depreciation cover, depreciation expense of your bike is not deducted from your claim amount at the time of a claim settlement. This add-on is available with comprehensive bike insurance plans as well as standalone bike insurance plans. This is one of the most popular and recommended bike insurance add-on covers.

  • Invoice Protection

    In case of total loss (more than 70% damage) or theft of your bike, the insurance company pays you the Insured Declared Value of your bike as compensation. However, this Insured Declared Value (IDV) is less than the invoice price which you pay at the time of purchasing your bike. The Invoice Protection add-on cover helps you claim the Invoice Price, i.e. total ex-showroom price of your bike plus taxes plus registration charges, of your bike in case of total loss or theft of your bike.

  • NCB Cover

    No Claim Bonus is the reward which is given to the policyholder for not making any claim during the policy period. This reward is offered by the insurer in the form of a discount on the own-damage premium of the bike insurance policy at the time of policy renewal. The NCB ranges from 20% to 50% of the own-damage premium depending on the number of claim-free years. However, if you make even a single claim during the policy period this NCB gets lost. But, with the NCB Cover, you can keep your NCB intact even after making a claim during the policy period.

  • Engine Protection Cover

    The damages incurred by the engine of the two wheeler are by default not covered under a bike insurance policy. However, if you opt for an Engine Protection Cover, the insurer will be liable to compensate you for damages incurred by the engine of your bike such as damage due to leakage of lubricants, water ingress, hydrostatic lock, damaged gearbox, broken crankshafts or pistons and cylinders. The repair cost of the internal engine parts is often high and can sum up to thousands of rupees or more. Thus, addition of this add-on to your comprehensive or standalone 2 wheeler insurance policy can save you from these expenses.

People Also Read