IDV stands for Insured Declared Value. It is the maximum amount your insurer will pay if your car is stolen or damaged beyond repair. In simple terms, it is the current market value of your car as agreed in the policy.
How Is IDV Calculated?
IDV is generally the manufacturer’s listed selling price minus depreciation based on the age of the car. Approximate depreciation slabs used in the industry are 5% for cars up to six months old, going up to 50% for cars around five years old. Beyond that, the value is agreed between you and the insurer.
How IDV Affects Your Premium
- Higher IDV: Higher premium, but better payout in total loss or theft.
- Lower IDV: Lower premium, but you may be under-insured.
Why You Should Not Choose a Very Low IDV
Some buyers reduce IDV to save premium. This is risky. If your car is stolen, you will get only the declared value, which may be far below the real market price. The small saving is not worth the loss.
Why a Very High IDV Also Does Not Help
An inflated IDV does not guarantee a higher payout. The insurer can reduce the claim to the actual market value, and you will have paid extra premium for nothing.
Tips to Set the Right IDV
- Check the market price of similar used cars on popular platforms.
- Consider the car’s condition and accessories.
- Compare the IDV offered by different insurers.
- Choose a value close to the fair market price.
When Does IDV Matter?
IDV is used for total loss, constructive total loss (when repair cost is over about 75% of IDV) and theft claims. For normal repair claims, the payout depends on the repair bill, not IDV.
Frequently Asked Questions
Can I change IDV at renewal?
Yes. Most insurers allow you to adjust IDV within a permitted range at renewal.
Does IDV include accessories?
Fitted accessories may be covered only if declared, so mention them to the insurer.
Is IDV the same as the price I paid for the car?
No. It goes down every year because of depreciation.
