Car insurance customers might have a fair idea of the coverage and the Sum Insured given in their car insurance policy. The sum insured in the car insurance policy is known as Insured Declared Value (IDV). IDV can be described as the value of the car agreed by the customer and the insurance company prior to the issuance of the car insurance policy. The liability of the insurance company in any case doesn’t exceed the Insured Declared Value present in the car insurance policy.
The car insurance IDV value means Insured Declared Value is the value declared and agreed by the insured of the car and the premium is determined based upon the IDV selected in the car insurance policy. The IDV car insurance value calculator for car is to be chosen by the customer and agreed before the inception of the policy. The IDV is different for different make model of the vehicles and is depreciated each year taking into consideration the depreciation of the vehicle due to usage, wear and tear.
The formula to derive the actual insured declared value is mentioned below:-
Insured Declared Value = (Company’s listed price – the depreciation value) + (Cost of vehicle accessories – the depreciation value of these parts)
What is Insured Declared Value (IDV)?
Insured Declared Value (IDV) means the maximum or the highest amount you shall receive from the insurer if the insured asset is damaged beyond repair. For example, in car insurance, your insurer shall offer you the IDV of your car if it is damaged so severely (total loss) that it cannot be repaired. Note that the IDV is declared by the owner of the asset while insuring it. It directly impacts the payable premium the higher the IDV, the higher the premium.
Nature of IDV in Car Insurance:
Pros:-
High IDV: Higher compensation will be paid during theft or total loss claims
Low IDV: Lower Premiums amount to be paid.
Cons:-
High IDV: higher premium amount to be paid
Low IDV: lower compensation will be paid during theft or total loss claim settlement leading to losses.
How does Insured Declared Value in Car Insurance Work?
IDV is calculated on the manufacturer’s selling price, also known as the ex-showroom price. The IDV calculator deducts the depreciation from the manufacturer’s listed selling price to determine the accurate IDV. The registration and insurance costs are not included while calculating the IDV. If the vehicle has parts that are not factory-fitted, the IDV of those parts will be calculated separately if insurance cover is required for them.
Let us understand how to calculate IDV for car insurance and the car insurance IDV depreciation table for the car insurance.
1. IDV Calculator & Table
The Insured Declared Value is calculated each year before the start of the car insurance policy. The IDV for the new car is taken as the 95% of the ex-showroom price of the car and the premium is calculated accordingly.
IDV for new car = 95% * Ex-showroom price
The IDV is then depreciated each year due to the usage, wear and tear of the car and after 5 years of the vehicle idv is mutually agreed between the customer and the insurance company. The IDV can also be considered as the market value of the car, in some exceptional cases where the car is maintained well the market car insurance value check could be far greater than the IDV value mentioned in the car insurance policy copy. Here is the table basis on which the IDV for your car is calculated each year.
|
Age of the Car |
Depreciation % |
| 6 months and Below |
5% |
| More than 6 months and less than 1 year |
15% |
| 1 year to 2 years |
20% |
| 2 years to 3 years |
30% |
| 3 years to 4 years |
40% |
| 4 years to 5 years |
50% |
For example, if you have purchased a brand new car with Ex-showroom price of Rs.10Lacs then the IDV for the first year would be 95% of the ex-showroom price which is Rs.9.5Lacs. At the time of first renewal the IDV would be 80% of the ex-showroom price and so on. The IDV of the car can be calculated using this table and the IDV for each can be arrived before deciding on the premium.
The IDV Calculation for new car and used car can be done. Check your car irda IDV calculator with the help of this link. It is the IDV calculation link provided by the GGI idv Council of India to provide the common people with access to the IDV they are eligible for their car.
2. Importance of Higher IDV Car Insurance
The IDV value of the car can be calculated using the above link and table and the highest and lowest IDV available to your car model can be known from the IDV calculator for car. Higher the IDV, higher would be the premium. Likewise Lower the IDV, lower would be the premium. The IDV is to be selected carefully by the insured taking into the premium payment capacity of the insured.
Insured declared value plays an important role at the time of claim settlement in total loss/ constructive total loss cases. The higher the IDV, higher would be the claim amount in case of total loss cases. Since the claims in car insurance IDV calculator are paid on the basis of your IDV it is highly important to strike a balance between the IDV and the premium to be paid.
When you buy a new car, the IDV is based on the manufacturer’s selling price taking depreciation into account. Below is the formula to calculate IDV in car insurance.
- With Accessories:-
IDV = (Manufacturer’s selling price – Depreciation Cost) + (Accessories Cost – Depreciation of these Accessories).
- Without Accessories:-
If you have not added any accessories to your car, then the formula is: IDV = Manufacturer’s Selling Price – Depreciation Cost.
Visit Our Portal to calculate the IDV of your car and get the best car insurance with the maximum IDV. The IDV of your car can be increased by choosing the insurance company which gives the maximum IDV to your car make and model.
What is the IDV Value of Car Models?
Here are some examples of calculated IDV of the most popular car model variants. You can use IDV calculator for calculating Insured Declared Value according to the different vehicle variants.
| Car Model Variant |
Insured Declared Value (IDV) |
Zero Depreciation (Add-on) |
Premium |
| Mahindra Scorpio S4 Plus 9S |
Rs. 3.18 lakhs |
Rs. 1807 |
Rs. 8146 |
| Chevrolet Spark 1.0 LS |
Rs. 5.42 lakhs |
Rs. 3028 |
Rs. 10363 |
| Honda City New |
Rs. 3.92 lakhs |
Rs. 1839 |
Rs. 9253 |
| Hyundai Venue E-diesel |
Rs. 4.42 lakhs |
Rs. 2138 |
Rs. 8299 |
| Toyota Platinum Etios |
Rs. 2.83 lakhs |
Rs. 1937 |
Rs. 13889 |
| TATA Tiago |
Rs. 4.8 lakhs |
Rs. 2978 |
Rs. 11383 |
| Maruti Swift LXI |
Rs. 3.64 lakhs |
Rs. 2163 |
Rs. 7328 |
Factors that affect IDV Value in Car Insurance:
The IDV of your vehicle is decided based on several factors, some of these include:-
- Age of the car: The age of your car is one of the biggest factors that help determine the IDV of your car. The higher the age of your car would be, the lower will be its IDV.
- Type of car: There are different types of cars available in the market. These include hatchbacks, sedan, SUVs, MUVs, etc. Each of these types of cars will have a different value. For example, SUVs tend to have a higher value than sedans. Similarly, sedans usually have a higher value than hatchbacks. Therefore, the type of car is one of the first factors that influence the IDV of your car.
- Make & model: The make and model also play an important role in deciding the IDV of your vehicle. This is because different car brands have different values, even if they are the same types of car (i.e. hatchback, sedan, etc.).
- Depreciation: This is one of the most important factors when calculating the IDV of your vehicle. Your car starts to depreciate as soon as you drive it home from the dealership. And, the older it gets, the more it depreciates in value. Therefore, an older car will have a lower IDV as compared to a new one, even if it is the same type, make and model of car.
- Place of registration: The location where your car is registered also plays a minor role in deciding its IDV. This is because the ex-showroom price varies between cities.
- Accessories: Lastly, if you have added any accessories to your car, then their depreciated cost can also be included when calculating the IDV of your vehicle.
Points to Keep in Mind While Calculating IDV of a Car:
The following points should be kept in mind while calculating the IDV of a car.
- The purchase price of the car should be deducted from the IDV.
- The depreciation value of the car should also be deducted from the IDV.
- The cost of fuel and maintenance should also be deducted from the IDV.
- The insurance cost, parking fee and other miscellaneous expenses related to owning a car should also be deducted from the IDV.
- The Insured Declared Value (IDV) is the maximum amount of compensation which you will receive in case of the total loss or theft of your car.
- When you buy insurance, IDV is the Intensity of Claims. You might reduce the IDV to lower premiums but this often leads to a reduction in claims too.
- You should always do your research and check with the car manufacturer before agreeing with the IDV set by your insurer.
- The value of the car is determined by deducting the depreciation rate from the actual market value of the car
- Check if your car insurance premium amount has been evaluated correctly according to the IDV of your own car.
- Always make sure to set the right IDV for your car as at the time of claim or total loss you will receive an amount equivalent to the value.
If you are considering purchasing car insurance, it is important to remember that you can negotiate with your provider to find an IDV that suits your needs. You should also be sure to get enough coverage to protect yourself against any circumstances.
Advantages & Disadvantages of Increasing Insured Declared Value (IDV) in Car Insurance:
| Pros |
Cons |
| The sum insured of your car insurance policy will increase. |
The premium of your car insurance policy increases. |
| You will get a higher claim amount. |
You might never raise a claim for a total loss. |
| It will offer you enough funding to repair or replace car parts. You can also use this money to buy a new car. |
You will suffer a loss by paying more money than required. |
*IDV is directly proportional to the premium of your car insurance policy. If you increase the IDV, your premium will also increase.*
Advantages & Disadvantages of Decreasing Insured Declared Value (IDV) in Car Insurance:
| Pros |
Cons |
| The premium of your car insurance policy will reduce. |
The sum insured will reduce. Hence, the claim amount will be lower in the case of total loss. |
| You save money when you pay less for buying the insurance policy. |
If the accidental damage expenses are higher, you will have to compensate for it. |
| The money can be used for other purposes. |
You will suffer a loss due to a lower claim amount. |
* IDV is directly proportional to the premium of your car insurance policy. If you decrease the IDV, your premium will also decrease. *
Conclusion:
IDV (Insured Declared Value) is the maximum sum assured by the insurer that a policyholder is supposed to receive in terms of compensation at the event of total damage or loss occurred to the insured vehicle. It is referred to as the current market value of the insured’s car. In other words, IDV is the amount that a policyholder can claim for reimbursement against the damage caused to the insured vehicle.
When a policyholder opts for a comprehensive car insurance policy, IDV is taken into account. The amount of premium payable by the policyholder is directly proportional to IDV. More the IDV more will be the amount of premium although a premium is usually 2% to 3% of the total value of IDV.
Frequently Asked Questions:
What will be the IDV of New Car?
Ideally, the insured declared value or IDV of a new car should be equivalent to the invoice value of the car. However, depreciation is deducted even from the value of a new car because it has been sold for usage. Generally, the depreciation charged on a new car is about 5% and thus, the default maximum IDV of a new car stands at 95% of the invoice value of the car.
What is the IDV for older cars 5 years?
As per the Indian Motor Tariff’s standard depreciation rates, a car that is more than 5 years will at least have a depreciation of 50% applicable to determine its right IDV
Why does IDV differ for different insurance companies?
Insurance companies reduce the IDV of the car to attract less premium. However, when paying a premium for the policy, always check on the insured declared value as you need to choose the right IDV which is equivalent to the value of your car.
Is it a good idea to go for a lower IDV?
Lower IDV can decrease your premium rates, but can cause difficulties at the time of claiming the compensation. Suppose, you insured your car at a lower IDV, and your car meets an accident. In that case, you might not get the expected amount from the company. That’s why I would like to suggest you not to lie about your car’s IDV for lower premium rates, because at last it will be your loss! That’s why it is very important to know the real car IDV value of your car.
Can I get complete compensation without depreciation?
Yes, you can opt for the return to invoice or new vehicle replacement add-on. This will cover the price gap between the IDV & the on-road price of your new car.