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Importance of IDV At The Time of Renewing Bike Insurance

Published On Oct 16, 2020 5:30 AM By InsuranceDekho

Want to understand how IDV affects at the time of bike insurance renewal?

Buying an insurance policy is not enough, renewing it on a timely basis is also important. Be it policy purchase or renewal, Insured Declared Value (IDV) plays a crucial role. IDV is the sum assured that the insurance provider is committed to pay in case of a total loss of the insured’s bike. The insurer sets the IDV considering an array of factors during the purchase or each renewal. Understanding the effects of IDV on insurance renewal is hence important before you go for your next renewal.

What Is IDV?

To analyse the role of IDV during renewal, you must know what IDV is. IDV basically is the current market value of the bike. The current market value refers to the selling price of the manufacturer. However, the insurer declares the IDV after cutting off the depreciation value. In case the concerned two-wheeler has been modified with external accessories, the insurer will count the price and depreciation value of the accessories as well.

Role of IDV At The Time of Bike Insurance Renewal

When you renew your bike insurance policy, the insurer sets a new premium different from the previous premium amount. While computing the new premium, the insurer considers the age, make, model, registration date and city, fuel type and most importantly depreciation value are the deciding factors of IDV. Since IDV is directly connected to the depreciation value, the depreciation rate becomes a key deciding factor of the renewed premium.

The depreciation value is imposed on the basis of the age of the vehicle. At the time of your policy renewal, the depreciation value is charged at the rates mentioned below in the table.

Age of Two Wheeler

Rate of Depreciation

Not exceeding 6 months


6 months to 1 year


1 year to 2 years


2 years to 3 years


3 years to 4 years


4 years to 5 years


As soon as the bike is out of the showroom, the depreciation factor kicks in. If you get your bike insured immediately after the purchase, 5% depreciation rate will be applied to your bike. However, with each passing year, the depreciation rate goes up at a 10% rate. Note that a maximum of 50% depreciation rate can be imposed.

Types of Bike Insurance You Should Know:

Third Party Two Wheeler Insurance

Comprehensive Two Wheeler Insurance Policy

You May Also Like To Read:

What is a Bike Insurance Renewal?

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Fine for Driving Two Wheeler Without Insurance

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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.

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