What is IDV in Insurance?

Only when your automobile is stolen or damaged beyond repair will you be entitled to the maximum IDV. Therefore, the higher the IDV, the larger the premium, and vice versa.

Your car's IDV is computed using the following factors:

• Details about your vehicle's registration.
• The city in which your vehicle is registered.
• The date of registration for your vehicle.
• The type of registration.
• The car's make, model, and manufacturer.
• The car's cubic capacity.
• The car's showroom price

• Age of the Car: Because the IDV represents the market worth of your vehicle, the age of your vehicle is critical in determining the appropriate IDV. The lower the IDV, the older the vehicle, and vice versa.
• Manufacturer Vehicle Make and Model: The make and model of your car has a direct impact on your IDV.
• Standard Depreciation (According to Indian Motor Tariff): The value of your car depreciates as soon as you drive it out of the dealership, and the proportion of depreciation grows with each year. This, too, has an impact on your IDV.
• City Registration Information: Your registration certificate contains information about your vehicle's registration. In addition, the city in which your vehicle is registered affects its insured declared value. Your car's IDV in a metropolis may be less than its IDV in a tier-II city.

The Insured Declared Value and your automobile insurance premium are inextricably linked. This means that the higher your IDV, the higher your auto insurance rate - and as your vehicle ages and its IDV depreciates, so does your premium. In addition, if you decide to sell your automobile, a greater IDV indicates you'll get a better price. Other criteria like usage, previous auto insurance claims experience, and so on may also influence the price.

Hence, when selecting the best car insurance policy for your vehicle, remember to consider the IDV as well as the premium. A company offering a low premium may seem appealing, but this could be due to the poor IDV on offer. In the case of total loss, a higher IDV results in larger compensation.

To accurately evaluate the worth of your vehicle, various aspects must be considered. But, if you want to estimate your vehicle's IDV on your own, you can use these two simple formulas:

• If you have no additional extras, your IDV is equal to the car's ex-showroom price minus depreciation.
• If you have added accessories, your car's IDV is calculated as follows: (car's ex-showroom price - depreciation) + (cost of accessories – a depreciation of the accessories)