# Should IDV be more or less?

Asked by: Faye Cruickshank  |  Last update: February 11, 2022

At best, IDV is the maximum sum insured amount that the insurance company pledges to compensate for your loss. 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.

## How much IDV should I choose?

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." The moment you take your car outside the showroom, the IDV starts to come down. "The value of a car depreciates by 5 per cent within six months of buying it.

## What if IDV is low?

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 value 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. ... The insurance premium is calculated based on this value.

## 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)

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

20 related questions found

### What does IDV mean in car insurance?

What is Insured Declared Value (IDV)? The term 'IDV' refers to the maximum claim your insurer will pay if your vehicle is damaged beyond repair or is stolen. Suppose the market value of your car is Rs. 8 lakh when you buy the policy. That means the insurer will disburse a maximum amount of Rs.

### Can we increase IDV value of bike?

Yes, you can most certainly set the IDV of your plan as per your requirement! The insurance company will estimate your bike's IDV based on its age, depreciation & condition. However, you can either accept their valuation or you can increase/decrease the IDV as per your preference.

### What is the role of IDV in car insurance?

IDV is the 'sum insured' in the car policy. It is the amount your car is insured for and forms the basis of all settlements in the event the car is stolen or damaged beyond repair in an accident. ... Therefore, when you get your car insured for the first time or at the time of renewal, IDV plays an important role.

### Can we get zero depreciation insurance beyond 5 years?

Best-Suited for –The Zero Depreciation cover is only applicable to new cars of up to five years old. If your car is more than five years old, you should consult your insurer for a suitable course of action. For cars older than 5 years, Zero-Dep is offered but only from offline sources.

### What do you mean by zero DEP insurance?

Zero Depreciation is also known as Nil Depreciation or Bumper to Bumper cover that leaves out the 'depreciation' factor from the coverage. It basically means that if your car or bike gets damaged following a collision, no depreciation is subtracted from the coverage of wear and tear of any body parts of your vehicle.

### What should my car IDV?

As explained, IDV is the amount that you will get in case your vehicle is stolen or suffers total loss. It is highly recommended to get IDV which is near the cost of market value of car. Insurers provide with range of 5% to 10% to decrease IDV which could be chosen by customer. Less IDV would attract less premium.

### Does IDV matter in bike insurance?

The Insurance Declared Value is an essential component of a bike insurance policy. IDV is something. Basically, it is the maximum sum assured offered by an auto insurance company to the policyholder at the time of claim.

### What is the importance of IDV in bike insurance?

Importance of IDV

IDV is not related to knowing the resale value of the two-wheeler, its purpose is to calculate the premium and arrive at a sum that the insurance company will pay you in case your insured vehicle faces irreparable damage or is lost due to theft. The technical word for it is Totaled or Total Loss.

### Do motorcycles depreciate faster than cars?

by age, they depreciate at a similar rate to cars, by mileage, they much depreciate faster though. Touring bike models can be expected to hold value for more miles; dirt bikes and sport bikes depreciate faster.

Content1. ​​In car insurance, Own Damage (OD) Premium provides you Own Damage (OD) Cover. Own Damage (OD) simply means cover against damages to your own car. Reliance General explains OD premium and its benefits in this video. Click to know more about car insurance from Reliance General.

### How insurance is calculated for a new car?

When you buy a new car and are getting insurance for it, the IDV is calculated on the basis of the price of the new car, i.e., its ex-showroom price.

### What is bumper to bumper insurance?

Bumper to bumper, nil depreciation or zero depreciation is the type of car insurance policy that offers complete coverage to your vehicle irrespective of the depreciation of its parts. ... And the best part is that your motor insurer will pay the entire cost of the replacement of the vehicle's body parts.

### Is it mandatory to buy personal accident cover?

Is Personal Accident Cover Mandatory for Owner-Drivers? In India, it is mandatory for all cars owners to own a personal accident cover. This cover needs to be purchased irrespective of whether you are buying a third-party liability-only policy or comprehensive policy for your car.

### How much does a bike depreciate per year?

Divide the original cost of the bike by its lifetime. For example, if the bicycle originally cost \$500 and the life expectancy is five years, then the depreciation expense would equal \$500 divided by five years. This would equal \$100 of depreciation per year.