Does IDV matter in car insurance?

Asked by: Mr. Lane Wiegand V  |  Last update: November 18, 2022
Score: 4.9/5 (28 votes)

The IDV is the key to the amount of motor insurance premium that you will pay for your car insurance. This is because IDV reflects the current market value of your car and mirrors the liability of your motor insurance company at the time of claim settlement.

Is it good to increase IDV value?

Getting an IDV that is close to the market value of your car is always the best bet. Decreasing the IDV value will result in lower premium but it also provides you with a lower coverage than is required. As your car grows older, the IDV decreases as it is.

How much IDV should I keep?

Normally, the depreciation of a new car is 5 per cent, hence by default, the maximum IDV should be 95% of the ex-showroom price of the car."

Is low IDV good?

In this condition, if you opt for a lower IDV, you are at a higher risk. Going for lower IDV will reduce your premium, but it would also result in much lesser features and benefits. It also means you won't get good claim amount when you register a claim against total damage or theft.

Does IDV decrease every year?

Insured Declared Value (IDV) means the maximum value for which your car is insured in case of total loss/theft in a particular year. This value normally decreases as the car depreciates over its lifespan.

Over Insured or Under Insured | Insured Declared Value(IDV) in Motor Insurance

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What if I choose High IDV?

Moreover, if you have an open parking space, the chances of theft are even higher. A higher IDV can assist you in case of car or bike theft as well. With the claim amount you acquire from your insurance company, you can plan the purchase of a replacement vehicle.

Can I increase the IDV value of my car?

IDV cannot be increased more than 10% of the previous IDV, others pls correct me if am wrong. Do not increase IDV more than the present market value of your vehicle. Insurance companies always look into their own rule books and then decide the compensation, hence increasing IDV more than 50% is not recommended.

Does IDV decrease in zero DEP?

IDV is the maximum amount that you can claim against total damage, loss or theft of your car. Thus, the more is the IDV, the more will be the premium towards a zero depreciation add-on cover.

How much IDV value decreases every year?

The IRDAI fixes the depreciation rate based on the age of the vehicle. While it is 5% for vehicles less than 6 months old, vehicles less than 1-year-old, the rate is 15% and thereafter it is 20%, 30%, 40%, and 50% every year.

What is the benefit of IDV in insurance?

The Insured Declared Value is the maximum sum assured that the insurance policy will cover in case of a claim of theft or total loss. This is simply the amount you will be reimbursed in the event that you incur a complete loss on your vehicle.

How is IDV calculated on a new car?

The simple formula to calculate IDV is:
  1. IDV = Manufacturer's registered price – depreciation.
  2. Insured Declared Value = (Company's listed price – Depreciation value) + (Cost of vehicle accessories - Depreciation value of the accessories)

How much IDV value is calculated?

IDV is calculated as the manufacturer's listed selling price minus depreciation. The registration and insurance costs are excluded from IDV. The IDV of the accessories which are not factory fitted is calculated separately at extra cost if insurance is required for them.

Can we get zero depreciation insurance beyond 5 years?

However, for vehicles older than five years, or the models that are discontinued by the manufacturer, such an IDV is decided mutually by the insurance company and you, the policyholder. Thus, the cover for zero dep car insurance after 5 years is not available generally.

Can we change car insurance company every year?

Yes, one can get the policy cancelled anytime during the policy period. However, it is advised to switch to a new insurance company upon the expiry of the policy or after buying a new insurance policy. This will avoid any gap in insurance coverage and you won't have to drive without insurance.

What is zero DEP in car insurance?

With zero depreciation coverage, the insured does not have to pay the depreciation value of the damaged or replaced parts and the policyholder can claim. It applies to vehicles that are less than 5 years old and the policyholder can avail of it twice during the policy tenure. Read more.

Is it worth taking zero depreciation?

Zero-depreciation is a good deal even if you have to pay a little extra. It will pay for itself many times over when you meet with an accident. You will be glad you decided on the zero-depreciation policy when you are presented with a bill from the garage.

How many times can you claim 0 DEP?

You can claim zero depreciation car insurance a maximum of two times during the tenure of your car insurance plan.

Which insurance company gives zero DEP after 5 years?

TATA AIG Zero Depreciation Cover

The most popular one among them is the zero depreciation add-on. The zero depreciation add-on, also known as bumper to bumper add-on and nil depreciation add-on, provides coverage against the depreciation applicable on your car and its parts.

What is NCB discount?

Definition: No-claim bonus (NCB) is a discount in premium offered by insurance companies if a vehicle owner has not made a single claim during the term of the motor insurance policy.

What is IDV and NCB?

Insured Declared Value and the No-claim-bonus are two important factors of every two wheeler insurance policy. The IDV of a two wheeler is fixed at the time of renewing or purchasing the insurance policy.

Should I increase IDV value Quora?

It's always better to keep the IDV as per depreciation value. The depreciation chart by Motor Vehicle: New Car to 1st Year - Insurance done at 95% of the Ex-Showroom Price.

Is personal accident cover mandatory?

Ans: Yes, as per the India Motor Tariff 2002, it is mandatory to purchase a personal accident cover. The car owner car can purchase this policy with third-party liability cover as well.

How car insurance is calculated?

The premium for OD cover is calculated as a percentage of IDV as decided by the Indian Motor Tariff. Thus, formula to calculate OD premium amount is: Own Damage premium = IDV X [Premium Rate (decided by insurer)] + [Add-Ons (eg. bonus coverage)] – [Discount & benefits (no claim bonus, theft discount, etc.)]