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IDV Calculator 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.

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What Is IDV Full Form?

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

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 - How to Calculate IDV of a Car?

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 in car insurance 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 of car 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)

Benefits of Using an IDV Calculator

When purchasing or renewing a car insurance policy, determining the right Insured Declared Value (IDV) is crucial. The IDV in car insurance represents the maximum sum assured that the insurer will pay if your vehicle gets stolen or suffers a total loss due to severe accidents or damages. One of the most effective tools you can utilise to determine the IDV of your vehicle is the IDV calculator. Here are the compelling benefits of using a motor IDV calculator:

1. Accuracy:

- Reduced Human Errors: An IDV calculator minimises the risk of human errors in calculating the vehicle’s IDV. It uses precise algorithms to calculate the correct IDV based on the vehicle’s age, model, and manufacturer’s selling price.

2. Convenience:

- Easy Access: IDV calculators are generally available online, allowing policyholders to access them anytime and anywhere, ensuring convenience and flexibility.

3. Informed Decision-Making:

- Insightful Information: The calculator helps you gain insights into the depreciating value of your vehicle over time. This information aids in making informed decisions regarding the coverage needed.

- Customisation: Based on the calculated IDV, you can customise your policy, choosing add-ons and deciding the premium you are willing to pay.

4. Time-Saving:

- Quick Calculations: Using an IDV calculator saves time as it instantly provides the IDV, unlike manual calculations, which can be time-consuming and complicated.

5. Premium Determination:

- Helps in Premium Estimation: Knowing the IDV of your vehicle can help in understanding and estimating the premium amount, as the IDV influences the premium of the policy.

6. Transparency:

- No Hidden Charges: The IDV value calculator for car promotes transparency by showing a clear breakup of the valuation, ensuring that there are no hidden charges or costs.

7. Customised Calculations:

- Versatility: Insurance value of car is calculated using IDV calculators and that often allow for adjustments based on various factors such as additional accessories in the vehicle, which helps in getting a more tailored IDV.

8. Comparison:

- Facilitates Comparison: With the calculated IDV, you can compare various insurance policies to choose the one that offers the best coverage at the most reasonable cost.

9. Enhanced Planning:

- Budget Planning: Knowing the IDV and corresponding premium helps in better financial planning and budgeting for your car insurance expenses.

10. Trustworthiness:

- Reliable Results: IDV calculators provided by reputable insurers or financial platforms often give reliable and accurate results, enhancing their trustworthiness.

Utilising an IDV calculator will simplify the process of determining the insured declared value of your vehicle, ensuring that you have adequate coverage in case of any unforeseen events such as theft or total loss due to severe accidents. By incorporating this tool into your insurance purchase process, you can make better-informed decisions and enhance your insurance purchasing experience.

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 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.

Factors that Help to Determine the IDV of a Car

The Insurance Declared Value (IDV) is based on various factors related to your car. Some of those factors are described below:

1. Type of Car – When it comes to IDV value, the type of car such as hatchback, sedan, and SUV affects it for sure. The value of a car is based on its type where the hatchback cars are generally cheaper in comparison to sedan cars or SUVs. Hence, the IDV can vary as per the type of your car.

2. Model of Car – Different types of car models are available in the market for different types of cars such as sedan cars can have different values of IDV. However, the model price is based on the brand and features it offers.

3. Location of Purchase - There is little difference in the price of a car based on the location of the car purchase. For instance, the ex-showroom price of the same car model can differ in different cities such as New Delhi and Mumbai.

4. Depreciation – Depreciation is known to be the loss of value or reduction in the monetary value of a car due to age. The older the car will get, the more the depreciation will be. With depreciation, two cars of the same car model can have different IDVs. Some insurance companies offer you the choice to increase the Insured Declared Value (IDV) by paying a higher premium

5. Accessories - Depreciation cost on the accessories of a car is also computed while determining the amount of IDV. Therefore, the value of depreciation of accessories can influence the IDV on the basis of age and working condition of car accessories.

Advantages & Disadvantages of High/Low IDV

Here’s a breakdown of the advantages and disadvantages of opting for a high or low IDV:

High IDV:

Advantages:

  • Better Coverage: A higher IDV ensures better financial coverage in case of total loss or theft of your vehicle. It provides a safety net that is closer to the current market value of your car.
  • Peace of Mind: Knowing that you have a higher coverage can provide peace of mind, especially if your vehicle is relatively new or expensive.

Disadvantages:

  • Higher Premium: A higher IDV will result in a higher insurance premium. This could strain your budget, especially if you have other financial commitments.
  • Not Always Fully Utilizable: The chances of total loss or theft, although existent, are relatively low. Hence, you might end up paying a higher premium for coverage that may not be fully utilized.

Low IDV:

Advantages:

  • Lower Premium: Opting for a lower IDV will result in a lower premium, making it a budget-friendly option.
  • Suitable for Older Vehicles: If your vehicle is significantly older, a lower IDV may be more reflective of its current market value.

Disadvantages:

  • Insufficient Coverage: A lower IDV will provide lesser coverage in case of total loss or theft. You may incur substantial financial loss if the reimbursement amount is much lower than the market value of your car.
  • Financial Risk: In the event of a serious mishap, the lower coverage may not be adequate to cover the financial loss, putting you at financial risk.

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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 good to have high IDV value?

    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
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