Insured Declared Value or IDV is the current market worth of your car, which is the selling price minus depreciation. When you file a claim for constructive total loss, IDV is the maximum value that your vehicle insurancecompany reimburses you. Here’s a detailed guide on how it works and everything you need to know about IDV in car insurance.
How is IDV in four-wheeler insurance calculated?
The Insured Declared Value of a car is calculated by deducting the car’s depreciation value from its manufacturer’s listed price. Your car’s make model and age play a vital role in determining the IDV value.Remember, the older the age of your car, the lower will be the IDV and vice versa. You must also remember that while calculating IDV in four wheeler insurance, car registration and insurance costs are excluded. Besides, if you have installed any additional accessories to your car that are not factory fitted, then their IDV is calculated separately ifthat part requires insurance.
Refer to the chart below for more information on the IDV of your car forvehicle insurance.
| Sr. No. | Age of your car | Insured Declared Value (IDV) |
| 1 | New car ( 0 to 6 months) | 95% (ex-showroom price) |
| 2 | 6 months to 1-year-old car | 85% |
| 3 | 1-2 years old car | 80% |
| 4 | 2-3 years old car | 70% |
| 5 | 3-4 years old car | 60% |
| 6 | 4-5 years old car | 50% |
| 7 | Cars above the age of 5 years | Flexible |
To calculate your car’s IDV value manually, refer to the formula below:
Insured Declared Value (IDV) = {[Ex-showroom price of your car + Sales Tax + Cost of fittings and accessories that are not included in the car’s listed selling price – depreciation] – Depreciation + Car’s registration costs + Vehicleinsurance costs}
How is Insured Declared Value (IDV) calculated for cars older than five years?
If your car is older than five years or you own a car that has become obsolete, then IDV for such a type of vehicle is based on its age, condition, and miles covered. Both the insured and the insurer come to a mutual agreement on the IDV of such cars.
Factors that influence IDV in vehicle insurance
- Type of car: There are different types of cars available in the market, such as sedans, hatchbacks, and SUVs. Different cars have varyingimpact on the IDV value. For example, if you own a hatchback and your friend owns an SUV, the hatchback’s IDV will be lower than the SUV’s.
- Car’s model: The model of your car also influences the IDV in car insurance. The top model that comes with more advanced fittings and features has a higher IDV than the base model.
- Location of purchase: The car’s ex-showroom price differs slightly from one city or state to another, and so does the IDV.
- Depreciation: Depreciation refers to the loss in the value of the car over time. The older the age of your car, the lower is the IDV.
- Accessories: While computing IDV, the depreciation on the accessories is considered, and its calculation is similar to that of the whole car.However, if you’ve installed any accessories that are not factory fitted, that’ll impact your IDV accordingly.
Points to consider when calculating a car’s IDV
The IDV is a key aspect at the time of filing a four-wheeler insurance claim. Therefore, you must keep the following things in mind while computing the same.
- If your car is stolen or irreparably damaged, the IDV is the maximum amount your vehicle insurance provider compensates for you.
- Lowering your car’s IDV only to lower your premium will put you in a financial bind at the time of claim settlement.
- Before signing or agreeing on the Insured Declared Value mentioned on your four wheeler insurancedocument, check the same with your car manufacturer.
- Calculate your vehicle insurance premium using a car insurance premium calculator, and compare it to the IDV of your vehicle.
- To get adequate cover for your car, don’t forget to negotiate the Insured Declared Value with your four wheeler insurance provider.
To conclude
The IDV for your four-wheeler insurance is only applicable if you have an own-damagecover under your vehicle insurance. If you only have third-party liability insurance, IDV doesn’t come into the picture.
