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Is High IDV Better In Car Insurance?

Updated On Oct 18, 2023

Is High IDV Better In Car Insurance?

IDV IS Insured Declared Value of a car. It is known as one of the important factors used for determining comprehensive car insurance cover  premium. IDV is the maximum amount that is agreed by your insurance provider, the amount will be repaid to the vehicle owner in case of complete loss or partial loss of the car. 

IDV is the market value of the insured automobile at the current time. Now the thing is that how we decide the value, it is basically decided on the basis  of the present value of the manufacturer along with the depreciation which is based on the age of the vehicle. 

Is High IDV Better In Car Insurance?

Why is it important to know your Insured Declared Value?

It is important to know about our Insured Declared Value as it is the main factor which is used to determine the cost of our premium for car insurance. One well known fact is the higher the IDV, the higher will be the premium. Usually the premium is found between 2% to 3% of the IDV.

Whether the IDV should be higher or lower?

Some of the owners of the car like to opt for lower IDV rate for their car as compared to the market rate, but this also comes with lower premium, so whenever we will make any claim, the amount of compensation will be low.

But on the other hand if we pay higher IDV, the premium will also be high,so whenever any claim will be taken, the amount will be increased.

But we have to keep one thing in mind is that the IDV is not decided by us, it is decided by the insurance company so it will not always be in our favour.

How to calculate our IDV ?

IDV is totally based on the selling price of our car which is decided by the manufacturer of the company. IDV is calculated at the time of purchasing the insurance or at the time of renewing of the insurance. The IDV is basically a mutual agreement done between the owner and the insurance company. IDV also checks the condition of the vehicle, the model of the car, spares availability etc.

Why is it important to choose a high IDV value?

We read that it is important to keep our car’s IDV high, but now question comes why it is important, so the reasons are stated below-

1. To provide financial assurance to the vehicle in case of any major damages takes place, so IDV     will help us to insure us a compensation for replacement of the vehicle.
2. In case our vehicle is stolen which is commonly seen everywhere around us,  that time our IDV will help us to claim for replacement of the vehicle or for any kind of compensation.
3. It also gives us a mental surety that if our vehicle is lost or has a major accident then we can claim for replacement from our insurance company.


We got to know that the IDV of our car is directly proportional to our insurance company. We learned that the higher the IDV,the higher will be the premium but it also gives us a relief that we can even claim higher. The IDV depends on the market value of our car which is decided by the manufacturer of the car. So, it will be a wise decision to invest in IDV as it is going to save us from the unsudden risks.

Also read: Why and How is a Car Insurance Background Check Performed in India?

List Of Documents Required For Car Insurance Renewal In India


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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