Why is IDV important?
Asked by: Jordi Waelchi | Last update: July 24, 2022Score: 4.3/5 (21 votes)
An IDV calculator is considered one of the most important calculators under motor insurance as it helps car owners to determine the amount that they will be paid during total damage or theft of the insured vehicle.
Is higher IDV better?
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.
What should be IDV value?
The IDV for cars between six months and one year can be 85% of the ex-showroom price. If the car is between the age of one to two years then its IDV can be 80% of the ex-showroom cost. The cars whose age is between two to three years, the IDV for such cars can be around 70% of the original price.
What if we increase the 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.
Why 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
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.
Does IDV reduce after claim?
The depreciation factor reduces the IDV claim every passing year, and so does its premium. Within the first six months of the new vehicle, the value of the car depreciates by 5%. If a vehicle is more than five years old, its price is determined by mutual discussion between both the parties (car owner and insurer).
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.
Can we change IDV?
IDV during renewals
At the time of policy purchase and each renewal, the premium is calculated based on the depreciated value of the vehicle. However, as a holder of the car insurance policy, one has the liberty to fix the IDV. "The car owner can alter the IDV while renewing car insurance.
Can I increase IDV of my bike?
Factors Affecting the IDV of your Bike During Policy Renewal
The IDV of a bike is inversely proportional to its age. It implies that lesser the age of the vehicle, higher will be the IDV. Simply put, the IDV increases over the time due to the depreciation factor.
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.
How is IDV calculated on a new car?
- IDV = Manufacturer's registered price – depreciation.
- Insured Declared Value = (Company's listed price – Depreciation value) + (Cost of vehicle accessories - Depreciation value of the accessories)
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.
Is engine protection cover needed?
Engines mostly get affected when your car is stuck in a wet area. It can lead to a hydrostatic lock that will damage the engine when exposed for a long time. Therefore, if you live in a flood-prone area, an engine protection cover is a must buy. It is also important if you have purchased an expensive new car.
Is it good to increase IDV value of car?
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.
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.
Is zero dep the same as RTI?
While the Zero Depreciation Add-on cover also sounds like it's got your back, it only pays you back the Ex-Showroom Price, but the RTI insurance also covers road tax and registration charges you had paid.
Does zero Dep cover engine?
Zero depreciation car insurance policy offers 100% coverage for all fibre, rubber and metal parts without deduction of depreciation. It does not cover engine damage due to water ingression or oil leakage. Any mechanical breakdown, oil change or consumables are also not covered in this policy.
Is painting covered in car insurance?
Various factors go into deciding whether you can or should claim insurance on your car body/paint repairs namely: Extent of damage: as a thumb rule, consider insurance claims only if repair and painting is needed for more than 2 body panels (or Rs 6000+ in repair charges)
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 the importance of IDV in bike insurance?
Insured Declared Value, or IDV for short, is the maximum amount for which your bike can be insured. This is the sum insured payable in case of the total loss of the two wheeler or an unrecoverable theft. In other words, Insured Declared Value is the current market price of your bike.