Understanding IDV In Car Insurance


New and used four-wheelers in India must be insured. You’ll also feel better knowing your four-wheeler is insured. Car insurance premiums must be paid when purchasing or renewing a policy. IDV is one of several factors that affect four-wheeler insurance premiums. *

What is the insured declared value?

The initial car insurance amount for a four-wheeler is its IDV. Suppose your four-wheeler is stolen or damaged beyond repair. In that case, the insurer will use the Insured Declared Value to value your four-wheeler insurance claim. Thus, you must insure your vehicle with the right IDV. *

Why is the IDV important in four-wheeler insurance?

  • Insured Declared Value determines car insurance coverage and premium. Higher Insured Declared Values mean more coverage and higher four-wheeler insurance premiums. *
  • After an accident, insurance companies estimate vehicle damage costs. They pay the damage and Insured Declared Value. If 75% damage occurs, they pay the full IDV.*
  • Because the four-wheeler is worth more, a higher Insured Declared Value indicates a higher risk. This will hike up car insurance prices. The insurer and insured may agree to undervalue the four-wheeler. Four-wheeler insurance Insured Declared Value decreases. The insured pays less for more insurance.

Four-wheeler insured declared value calculation

Market value minus depreciation expenses equals IDV. If the vehicle has add-ons, it

considers its depreciation. Four-wheeler insurance IDV formula:

New four-wheelers

It will consider the manufacturer’s market pricing. Ex-showroom price minus depreciation. The Insured Declared Value of a new four-wheeler comes to 95% after six months because it loses 5% of its value. That’s your IDV in car insurance.

IDV = Company Market Price minus Depreciation Costs

Old four-wheelers

Older four-wheelers have similar IDVs. New four-wheelers consider the same factors. It’s based on manufacturers’ market value and depreciation.

IDV = Market Value minus Depreciation Value

Four-wheeler extra accessories

Add accessories to your four-wheeler, and the insurance company will consider depreciation. Four-wheeler insurance includes parts depreciation and market value. The four-wheeler’s age doesn’t matter. These extras depreciate little if the vehicle is new. As four-wheelers age, depreciation increases.

IDV = {Present Market Worth Stated by the Manufacturing Company – Depreciation Costs} – {Accessory Costs – Parts Depreciation Value}

Renew your old four-wheeler car insurance with the correct IDV. Due to the four-wheeler’s increased age, the insurer may negotiate a lower depreciation value. Depreciation value can be reduced upon renewal. Negotiate a 15% IDV change. Car insurance IDVs vary by insurer. When replacing the vehicle and accessories, enter the correct depreciation values into the Insured Declared Value. *

Factors affecting IDV in four-wheeler insurance

  • Car make, model, and manufacturer
  • Registration date determines car age
  • Four-wheeler insurance requires the city of registration. IDVs vary by state and city due to market prices
  • Owned cars


Thus, four-wheeler insurance’s maximum coverage depends on the ThisInsured Declared Value. The insurance company will pay this amount for four-wheeler theft or significant damage. It’s your four-wheeler’s value. Thus, when renewing or buying four-wheeler insurance, IDV computation is crucial. The best IDV in insurance is close to your vehicle’s market value. *

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* Standard T&C Apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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