Impact of IDV On Renewing Two Wheeler Insurance Explained

The Insurance Declared Value (IDV) is a crucial element of a bike insurance. The significance of the IDV can be comprehended with the fact that it can affect your bike insurance premium amount. Actually, it is the sum assured amount that you can receive from your bike insurance company at the time of claim. This amount is set by the insurance provider equals the market price of your bike, which changes at the time of renewal. To understand the concept of the IDV and its effects on the renewal of bike insurance policy, let’s start from scratch.

What Is Insurance Declared Value?

The Insurance Declared Value (IDV) is the present market value of your bike and in a situation where your bike sustains a total loss or theft, the IDV is provided to you by the insurance company in the form of compensation. It can be calculated with the below given simple formula:

Insured Declared Value = (Company’s listed price – the depreciation value) + (Cost of vehicle accessories - the depreciation value of these parts)

The Insured Declared Value (IDV) based on the manufacturer’s listed selling price and then the depreciation is applied on it. The depreciation factor influences the value of your bike at the time of bike insurance renewal. However, in case the accessories of your bike are company fitted, then the calculation of IDV is done separately and simply with the following formula:

Insured Declared Value = Manufacturer’s registered price – the value of depreciation

In simple terms, the moment you take your bike out of the showroom, its prices start to fall due to the depreciation and it affects the Insured’s Declared Value as well.

How IDV Is Affected During Bike Insurance Renewal?

The Insured Declared Value (IDV) of a bike is affected by numerous factors such fuel type, RTO location, make and model, date of registration, etc., but the most common factor to impact its value is age which causes depreciation on its value. The Insured Declared Value of the bike decreases with time due to the effect of depreciation. Below is the table to show the dynamics between the age of your bike and its IDV.

Depreciation Rate Followed Under Two Wheeler Renewal Premium Calculation

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


The entire value of the bike falls down by 5% within the first six months of its purchase. After that, each year the value keeps depreciating, which is something the insurers keep in mind while calculating the IDV during the subsequent bike insurance renewals.

However, if the age of the bike is more than 5 years, its IDV is derived based on its serviceable and body parts condition. However, in case of old vehicles, the IDV is finalised by mutual agreement between the insurer and the insured individual. Some insurance companies can even call surveyors to calculate the right IDV, the cost of which is to be borne by the insured person.

Why Disclosure of Right IDV Is Important During Policy Renewal?

It is crucial to unveil the right Insured Declared Value (IDV) as it directly impacts your bike insurance premium. Besides, the amount of claim is settled that you are eligible to receive is based on the IDV in the situation of total loss or theft.

You should never try to reduce the IDV to save the cost of the insurance premium. It can cost you a hefty price in the future as during a claim, the IDV is taken into consideration instead of the current market value of the bike. Therefore, having a low IDV can prove costly to you while filing a total loss or theft claim. However, it is recommended to keep the IDV closer to the market value as it will help you get the right amount compensation in case of theft or total damage to your bike.


The Insured Declared Value (IDV) plays a significant role during the bike insurance policy renewal process. You should always declare the right IDV value of your bike or scooter, otherwise, you may be entitled to pay more in the long run. There are several insurance platforms that provide you attractive deals and could suggest you the best available option. Do compare all the available insurance options while renewing your policy to make a wise decision. It will help you find the best insurance provider that can offer you the best value for your bike with which you can save a lot of money in the future.

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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.

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