When you are looking to insure your car, you should know the Insured Declared Value (IDV) of the car. It is the maximum Sum Assured fixed by the insurance company which is provided on theft or total loss of vehicle. IDV is basically the current market value of the vehicle and if the vehicle suffers a total loss, and is given as compensation to the policyholder by the insurer.
The value of the car is calculated as manufacturer’s listed selling price minus depreciation. The cost of registration and insurance are excluded from IDV. When there are accessories which are not factory fitted, they are calculated separately at extra cost if insurance is required for them.
How to Calculate IDV?
The selling price of a new car that the manufacturer decides is the basis of IDV calculation.
Insured Declared Value = (Company’s listed price – the depreciation value) + (Cost of vehicle accessories – the depreciation value of these parts)
The Depreciation Schedule to fix IDV of the Vehicle
|
Age of Vehicle |
% Depreciation for adjusting IDV |
|
Not exceeding 6 months |
5% |
|
Exceeding 6 months but not exceeding 1 year |
15% |
|
Exceeding 1 year but not exceeding 2 years |
20% |
|
Exceeding 2 years but not exceeding 3 years |
30% |
|
Exceeding 3 years but not exceeding 4 years |
40% |
|
Exceeding 4 years but not exceeding 5 years |
50% |
If the vehicle is aged over 5 years then IDV is calculated by mutual agreement between the insurer and the insured and by assessment of the vehicle’s condition done by surveyors, car dealers etc.
Things to consider while calculating IDV
Make sure that you take into consideration the below-mentioned points to carefully assess the IDV of your car-
- It may cost you less premium if the correct valuation of IDV is done.
- Do not reduce the IDV of your car just to reduce the premium, as this could lead to less claim or a disputed claim
- With the right declaration of IDV, rightful claim can be made.
- Please check with the manufacturer or do your research before agreeing to the IDV set by your car insurance provider
- Also, assess the premium cost and check if it has been correctly evaluated on the basis of your car’s IDV
- It is vital, you get adequate coverage and are satisfied with the IDV or you can also negotiate.
- While renewing your car insurance plan, ensure that the premium is determined on the basis of the IDV.
- Your car’s IDV can also be fixed online, but it varies from one insurer to the other.
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