All You Need To Know About Insured Declared Value (IDV)

Easy to slip through traffic snarls, while being cheap to maintain looking at today’s rising petrol prices – there’s no gainsaying that a two-wheeler is the best choice for India. But there’s another aspect of two-wheelers we rarely look at: insurance. 

And that’s where we step in. In this article we will give you a clearer picture of Insured Declared Value or IDV, a central focus of your vehicle’s insurance process, so that you can be rest assured you're getting the best deal the next time you renew your insurance.

What is IDV exactly?

Insured Declared Value (IDV) is the current market value of your two-wheeler. Essentially, it is the amount agreed by you and the insurance provider as the value of your bike before the policy agreement is signed upon by both parties. *

Why is IDV important?

The IDV of your bike is the maximum amount the insurance company will compensate you in case of total damage or theft. The amount you will pay as the bike insurance premium also depends on the agreed IDV of your bike.

So, in a sense, a comprehensive policy with the accurate IDV of your bike will provide you with maximum financial protection in the worst-case scenario.

Now, before we proceed, the ‘accurate’ IDV refers to the right value of your bike and is determined by factoring in the make and model of the bike, along with its age, for an estimate of depreciation. This gives us a clearer estimate of the premium you’ll need to pay. *

Factors that affect IDV

Since vehicles are in essence depreciating assets, their IDV, too, reduces with time. The IDV of your bike depends on:

● The city you’ve registered your bike in *

● Age of your bike *

● Ex-showroom price of your bike *

● Type of bike insurance policy *

● Insurance policy period *

When you look for insurance online, the parameters above are directly computed by the insurer. This means that while the IDV of a brand new bike can be as much as 95% of its ex-showroom price, it may go down by about 50% by the time the bike is five years old. *

Why the correct IDV is important

As mentioned before, the premium amount you pay depends on the IDV. So technically, you can choose a lower IDV for reduced premiums. However, this may lead to you incurring additional costs in case of total damage or theft. On the flip side, a higher IDV may theoretically assure higher compensation in case of total damage or theft, but it also means you’ll need to pay higher premiums. But that’s not all: you may still not get as high an amount when compensated, chiefly because your two-wheeler’s age and depreciation will also be considered when finalising the claim. *

Summing up…

Insurance is one of the few things we pay for that we wish we may never need to two wheeler insurance claim. That said, selecting the right IDV for your bike when insuring your bike (or when renewing said  insurance) will not only get you the right value for your money, but also soften the blow during a worst-case scenario. *

* Standard T & C Apply. 

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