IDV stands for Insured Declared Value, which is the approximate market value of the vehicle at any given time. This is the sum insured by the insurance company under the entire policy.
Let’s say, you bought an SUV car for Rs. 30 lakh and got it covered by Bajaj Allianz car insurance. However, after a year, its depreciated market price drops to Rs. 24 Lakh. If you file a claim at that time, you are eligible for the same insurance benefit of Rs. 24 Lakh. In the event of significant damage or total loss of the vehicle, full coverage may be available.
IDV in insurance is determined by the vehicle’s age and market value. For example, there are four different models of a particular car. The most recent or advanced model will be more expensive than others. As a result, the insurance company would provide more coverage for that model than for the others. As a result, the IDV for car insurance may be high.
Furthermore, regardless of model type, all vehicles experience gradual wear and tear. As a result, its value depreciates over time. The IDV in car insurance decreases as the cars get older. You can calculate your vehicle’s IDV right now using an online car insurance calculator.
The significance of IDV: IDV full form in insurance is Insured Declared Value. The IDV is significant because it represents the maximum coverage provided. It is determined by the depreciation value and the car’s current market value. When purchasing an insurance policy for a car or any other domestic four-wheeler vehicle, the IDV is determined by the insurance provider. *
If the IDV is high, it means more coverage and as a result, higher car insurance prices. *
Should you opt for low IDVs in car insurance?
People frequently choose low IDVs in auto insurance on purpose. They undervalue their vehicles to avoid paying higher premiums. Although you can reduce the IDV based on depreciation, you should never undervalue your vehicle. To have a lower IDV, it should be at least its current market value.
Lower IDV has low premiums because it provides less coverage. If your vehicle sustains significant damage or is totalled, your insurance payout may be reduced. It could be less than the car’s actual value. In this case, you may suffer a financial loss. You will be compensated as per the Insured Declared Value in the insurance policy. *
Therefore, never undervalue your four-wheelers and never settle for a lower IDV. This will limit your maximum claim and coverage even if you could be eligible for more. * Standard T&C Apply
Factors Influencing IDV in Car Insurance:
- The car’s manufacturer, make, and model.
- The registration year determines the vehicle’s age.
- In car insurance, the city of registration is essential for IDV because market prices differ in different states and cities.
- The car’s depreciation rate
- Surveyors/car dealers determine the depreciation value over five years based on the vehicle’s condition.
- The Insurance coverage varies depending on the insurer. The insured can negotiate the policy’s limitation and maximum cap.
* Standard T&C Apply
The maximum coverage amount in car insurance is determined by the IDV. It is the actual sum that the insurance companies will compensate in the event of a theft or significant vehicle damage. It is the amount that your car is worth. Therefore, it is crucial to calculate IDV correctly and buy your policy from a reliable provider.
Do check out Bajaj Allianz car insurance policies as they have a high claim settlement ratio of 98%.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.