Cutting Down IDV To Decrease Car Insurance Premium - Yay or Nay?
Published On Feb 18, 2019 5:30 AM By Megha Raha
Should You Lessen a Vehicle's IDV To Save on Car Insurance Premium?
When purchasing a car insurance policy or renewing one, do you reckon it’s ideal to settle for any cheap car insurance policy? If yes, then you might be wrong! Agreed - policies with the lowest premiums attract the attention of car owners in a snap. However, is it really worth it? No doubt, markets are flooded with insurers offering a variety of quotes for the same vehicle. Confusion springs up when one insurance company is offering a significantly cheap auto insurance policy premium.
In such scenarios, we certainly, get thinking -
Are we supposed to be happy clinching the best car insurance deal at the cheapest of the price?
Is the coverage compromised?
Are we missing out on any of the key features?
Time to bid adieu to all confusions and finally start thinking on foot!
If the premium is really less, your policy is more likely to be traded off for a lower IDV. Deductibles could be higher and worst of all, you might be kept away from a ton of benefits. In a nutshell, think hard before you buy car insurance.
What are the consequences of decreasing IDV of a vehicle?
Before jumping into the consequences, are you aware that IDV stands for insured declared value? Good if you are. Don’t worry if you are not thoroughly schooled about the concept. In simple words, IDV stands for the maximum value for which your car is insured. This comes in handy in situations of theft or total loss. One could also define it as the prevailing market value of the vehicle.
You are certainly aware that the car is a depreciating asset. Obviously, the value of the vehicle lessens with time and so does its IDV. The value agreed upon is mutually fixed between you and the insuring company. Little were you aware that the calculation of car insurance premium depends much on the IDV of the vehicle. Still, confused? Well, a higher IDV ideally implies a higher premium and a low premium for a lesser IDV. However, the change is witnessed even for a persistent rate of premium.
The insured declared value of a vehicle depends not only on the depreciated value of the vehicle but also on its prevailing market price. You could certainly consider the option of cutting-down the IDV of your vehicle so as to pay less premium for your selected vehicle insurance.
Think About The Aftermath!
Do you think decreasing the IDV of a vehicle, quite under the actual market value of your car could do you much good? Probably not! It simply means you are fixing upon a value much less than the amount your vehicle is really worth. Result? You will be bagging in the lower amount you’ve settled for in case of theft or total loss. Sounds like a risk, right? Well, it actually is, particularly in cases of such mishaps.
Word of Advice:
Car insurance prices could vary. Taking an informed decision is extremely crucial. Having said this, it is always suggested that one must never rush into lowering the IDV of a vehicle. Yes, you might just save a chunk of money by paying less premium but you will also be losing out on some good funds in case of claims.
Do you still have questions on car insurance popping up every now and then? Well, we at www.insurancedekho.com are right at your fingertips, providing you solutions to queries.
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