IDV Calculator - IDV Calculation in Car Insurance

Calculate your Car IDV

All About IDV in Car Insurance

Purchasing a car insurance policy is a long-term investment. There is an ample number of car insurance companies offering new policy as well as policy renewal plans at a competitive market rate. Investors prefer taking a comprehensive car insurance policy at an affordable premium rate. An important thing to keep in mind before choosing a policy is IDV (Insured Declared Value) along with premium rates. As an insurance policyholder, it becomes important to know the nitty-grittiest of IDV.

What Is IDV Full Form?

All of us are aware there are many terms of motor insurance which can be tough to know but are acutely vital to be conversant with, one particular term is IDV. IDV full form describes Insured Declared Value.

What is Insured Declared Value (IDV) In Car Insurance?

IDV (Insured Declared Value) is the maximum sum assured by the insurer that a policyholder is supposed to receive in terms of compensation at the event of total damage or loss occurred to the insured vehicle. It is referred to as the current market value of the insured’s car. In other words, IDV is the amount that a policyholder can claim for reimbursement against the damage caused to the insured vehicle.

When a policyholder opts for a comprehensive car insurance policy, IDV is taken into account. The amount of premium payable by the policyholder is directly proportional to IDV. More the IDV more will be the amount of premium although a premium is usually 2% to 3% of the total value of IDV.

Popular Car Model Variants with Insured Declared Value (IDV)

Here are some examples of calculated IDV of the most popular car model variants. You can use IDV calculator for calculating Insured Declared Value according to the different vehicle variants.

Car Model Variant

IDV* Zero Depreciation (Add on)* Premium (Basic)*
Maruti Swift LXI ₹ 3,28,616 ₹ 1,807 ₹ 8,416
Hyundai Venue E Diesel ₹ 5,58,000 ₹ 3,069 ₹ 15,787
Tata Tiago NRG ₹ 3,96,000 ₹ 2,178 ₹ 10,052
Mahindra Scorpio S4 Plus 9S ₹ 8,13,998 ₹ 4,477 ₹ 22,384
Chevrolet Spark 1.0 LS ₹ 2,49,362 ₹ 1,371 ₹ 8,031
Toyota Platinum Etios ₹ 4,90,115 ₹ 2,941 ₹ 14,916
Honda City New ₹ 6,18,441 ₹ 3,315 ₹ 11,243
Ford Ikon 1.3 CLXi ₹ 3,94,839 ₹ 2,172 ₹ 10,646

*The premium rates are calculated on the basis of the city (Delhi) and year of registration (2019).

IDV Calculator - Get Car Insurance with High IDV

IDV Calculation - The insurance company determines the current value of the insured’s car by taking a few factors into consideration such as brand, model, and age of the car. IDV is determined on the basis of the selling price fixed by the manufacturer and the percentage of depreciation charged on it.

The simple formula to calculate IDV is:

IDV = Manufacturer’s registered price – depreciation

The cost of accessories that were not fitted by the manufacturer at the time of delivery will be calculated as an additional. In formula will also include components of the accessories and then the IDV will be calculated as:

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

Car Depreciation Rate Table for IDV Calculation

Here is the depreciation schedule to fix IDV of a car:

Age of Car

Depreciation Rate for Calculating IDV

Under 6 months

Nil

6 months - 1 year

5%

1 year - 2 years

10%

2 years - 3 years

15%

3 years - 4 years

25%

4 years - 5 years

35%

5 years - 10 years

40%

Above 10 years

50%

The final value of the insured vehicle found after deducting depreciation is the maximum compensation that the policyholder can claim at the time of loss or theft. It is very important to know about the value of your IDV. Never reduce your IDV for paying less premium; otherwise, you will end up getting fewer claims and incur a loss.

Impact of IDV in Car Insurance Policy

Insured Declared Value plays a very crucial part when it comes to calculating the own damage components of the car insurance premium. Though own damage cover is optional and only be available if the policyholder is opting for a comprehensive car insurance policy. The policyholder may or may not opt for this cover, but the own damage premium will be estimated according to IDV. People who will opt for their own damage cover will get compensation in case of damage or theft of the insured vehicle. The premium for own damage cover will be 2% to 3% of the IDV of the insured vehicle. Though it may vary based on certain factors such as the age and cubic capacity of the vehicle. Hence, the higher will be the IDV, the higher will be your car insurance premium.

At the time of renewal of the car insurance policy, the premium charged to the policyholder must be justifiable. Therefore if the insurer has not declared the IDV you should immediately contact the insurer and get the necessary details. It is important to note that the premium of a comprehensive car insurance policy is has a severe impact on the IDV. The ignorance today might turn problematic at the time of claim settlement.

Therefore, one must not be in a hurry to lower down their IDV. It is true that initially, you might end up saving some money by cutting down on the value of the premium, but at the end, you might lose a big chunk of compensation borne by the insurer at the time of claim settlement. It is always recommended to get your insurance at the full amount of IDV because this is what you are going to get at the time of damage or loss. Make sure to check the policy document after they arrive to make sure the values are the same as discussed earlier.

Points to Keep in Mind While Calculating IDV of a Car

You should keep the below-mentioned tips into your consideration to compute the IDV of your car -

1. The Insured Declared Value (IDV) is the maximum amount of compensation which you will receive in case of the total loss or theft of your car.

2. Don’t just lower the IDV to reduce the premium of your policy as it may also lessen the amount of claims.

3. You should always do your research and check with the car manufacturer before agreeing with the IDV set by your insurer.

4. Examine the amount of car insurance premium and check if it has been evaluated correctly based on the IDV of your car.

5. You can negotiate with the insurance company to get your desired IDV as it is crucial to get sufficient coverage to insure your car.

The policyholders can also fix their car’s IDV online, however, the value may differ from one insurance company to another insurance company. Also, fixing the IDV allows you to alter your IDV during the renewal of your car insurance policy.

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FAQs about Insured Declared Value in Car Insurance

  • Why does IDV differ for different insurance companies ?

    The Insured declared value is decreased in order to keep the rate of premium low. Make sure that you opt for the right insurance company that offers correct IDV value for your car even if the amount of premium is higher.

  • How does Insured Declared Value affect the car insurance premium?

    The insurance premium and Insured Declared Value of a car goes hand in hand. It simply means that the higher Insured Declared Value of a car, the higher would be the premium for your car insurance------ and with the increase in the age of your car, the Insured Declared Value or IDV depreciates, the premium also decreases. Therefore, whenever you are selecting the right car insurance plan, make sure to know about the Insured declared value being offered along with the premium.

  • Is it a better option to go for a higher IDV?

    This totally depends upon the type of car you own and the condition of your car. A higher Insured Declared Value is appropriate for vehicles that are not very old and are in a good condition. Make a note that higher the Insured Declared Value, the higher would be the premium payable on an yearly basis.

  • What happens in case an individual declares a low Insured Declared Value?

    At times, people declare a low Insured Declared Value in order to pay lower premiums. However, you must always remember that while the premium you pay may be cheaper, the compensations paid by the insurance provider at the time of claims too would be lesser and it may not be sufficient for your vehicle. Therefore, it is advisable to not opt for a low or high IDV but the right one.

  • What all aspects affect the calculation of IDV?

    The calculation of Insured Declared Value is dependent upon the following aspects:

    • Make, model and manufacturer of the car
    • Registration date of the vehicle
    • Vehicle registration details including registration city
    • Engine CC and ex-showroom cost of the car
  • What is the meaning of Insured Declared Value (IDV)?

    Insured Declared Value is the maximum claim that your respective insurance company would pay in case your car gets stolen or damaged beyond repair. For instance, in case the market value of your vehicle is Rs 8 Lakh at the time of purchasing the plan, it means that the maximum amount that the insurance company would disburse is Rs 8 Lakhs.

  • Why does the Insured Declared Value differ between the insurance companies?

    The Insured Declared Value is decreased, in order to keep the rate of premium low. Ensure that you select the right insurance provider that offers correct IDV value for your car, even if the amount of premium is higher.

  • What is the Insured Declared Value of the vehicle outside the showroom?

    When the vehicle comes out of the showroom, its value depreciates due to age and usage. Since, your car’s market value drops down as soon as the vehicle is driven out of the showroom, there is a decrease in the Insured Declared Value accordingly.

  • Is there any option to increase the Insured Declared Value (IDV) of the car?

    Yes, in case you are purchasing a car insurance plan online, you would get the flexibility to increase or decrease the Insured Declared Value of your vehicle. However, it is recommended for the car owners to only declare the accurate Insured Declared Value of their car.

  • Will the purchase location have any impact on my car’s IDV?

    Yes, depending on the ex-showroom price of the vehicle, the IDV may increase or decrease. As the ex-showroom cost differs for different locations, the Insured Declared Value would also vary.

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#Applicable on non-inspection cases i.e. existing policy has not expired or when buying a policy for a new vehicle.