How do insurance companies calculate IDV?
The simple formula to calculate IDV is:
- IDV = Manufacturer’s registered price – depreciation.
- Insured Declared Value = (Company’s listed price – Depreciation value) + (Cost of vehicle accessories – Depreciation value of the accessories)
How does IDV affect car insurance?
The IDV of your car is directly proportional to your car insurance premium. This means the higher the value of IDV, more will be the amount of premium charged to you. Similarly, as the IDV of your car will reduce with its increasing age, the premium amount payable by you will also reduce.
What is insuredinsured Declared Value (IDV)?
Insured Declared Value or IDV in short is easy to understand. It is the monetary value of a product and the owner of that product declares the IDV. In the case of car insurance, the IDV of your car is the Sum Assured amount when you raise a claim during the policy period against your car insurance.
What is IDV for a new car?
What is IDV for a new car? The Insured Declared Value of a new vehicle is based on the manufacturer’s price minus the depreciation cost of the vehicle. Please note, the depreciation rate is based on the depreciation rate for fixing Insured Declared Value published by the Insurance Regulatory and Development Authority (IRDA) of India.
What happens if your IdV is lower than market price?
But a lower IDV that is less than the reasonable market price may pose a problem too. This is because you will receive a lower claim amount. Now, your insurance premium is directly proportional to the IDV of your car. As your car becomes older, the premium will reduce. Manufacturer, make, and model of the car.
How does standard depreciation affect your vehicle’s IdV?
Standard Depreciation (As per Indian Motor Tariff): Your car’s value depreciates from the moment you drive it out of the showroom– and the percentage of its depreciation increases with each year. This too ultimately affects your IDV. Here’s a table to help you understand the respective depreciation rates with context to your car’s age.