Reasons Why You Must Set Correct IDV For Comprehensive Car Insurance
Updated On Oct 16, 2023
Read this article to understand why it is important to set the correct IDV (Insured Declared Value) for your comprehensive car insurance.
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Buying a car is extremely expensive. As a result, you must ensure that you purchase comprehensive car insurance to protect yourself from the financial consequences of any accidents or repairs. It is critical that you purchase an affordable comprehensive cover when purchasing your policy. The IDV (Insured Declared Value) of your car is a significant factor in calculating the cost of your car insurance premium. Learn what IDV is and why it's important in this post.
What Is The IDV of Your Car?
The term "Insured Declared Value" (IDV) is an acronym for "Insured Declared Value." It's nothing more than the market value of your car right now. From the moment it leaves the showroom, your car is subjected to normal wear and tear. Depreciation is the phrase used to describe how wear and tear affect the market worth of your car. The value of depreciation is removed from the car's selling price to determine its worth.
The market value of your car is used by insurance providers to estimate the cost of your car insurance premium and settlement. You will pay a higher premium if your car has a high Insured Declared Value because the repair expenses will be high as well. If your car's IDV is large, you'll also receive a bigger settlement amount. If your car has a low IDV, you will pay a cheaper premium and receive a smaller payout when you file a car insurance claim.
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How Is IDV Important For Your Comprehensive Car Insurance?
In the insurance industry, your car's Insured Declared Value is given a lot of weight. The IDV of your car is taken into account both when you buy it and when you renew it. In the event that your car sustains substantial damage, it is also taken into account while settling your insurance claim. The following are a few reasons why setting the right IDV for your comprehensive car insurance is important -
When Purchasing Or Renewing A Car Insurance Policy
Your car's IDV will have a direct impact on your car insurance rate when you buy it and even when you renew it. This is due to the fact that depreciation of auto parts would have affected your car's overall market worth. As a result, your car's IDV would have decreased. If your car's IDV is high, you'll have to pay a higher premium. On the other hand, if your car's IDV is modest, you'll probably pay a lower premium.
While Making A Car Insurance Claim
When settling a claim, insurance companies take your car's Insured Declared Value into account heavily. In the event that your car is involved in an accident that damages it beyond repair, your insurance carrier will pay the amount equivalent to the Insured Declared Value of your car at the time the claim is lodged. As a result, if your car's IDV is large, you'll get a bigger claim amount. Similarly, if the IDV of your car is low, you will receive a lower claim amount.
Accuracy of The IDV
Setting the right IDV for your car is critical for both paying the right premium and receiving the right claim amount. If the Insured Declared Value of your car is incorrect, you may not receive the full claim amount that you are entitled to. If your IDV is set too high, on the other hand, there's a good chance you'll end up paying a higher claim amount. When you claim your car insurance, settling the exact value will assist your insurance company in determining the correct premium cost as well as the settlement amount. As a result, figuring out your car's IDV is critical.
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According to the Indian Motor Vehicle Act, having car insurance is required. Therefore, make sure you buy a comprehensive car insurance policy that provides maximum coverage at a reasonable price. When purchasing your comprehensive insurance coverage, check the IDV of your vehicle and pay the correct premium to receive the appropriate claim amount.
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.