Insured Declared Value or IDV is the maximum sum assured provided by the insurer in case of total loss or theft of your two-wheeler. IDV is the vehicle’s current market value and is granted to you in case of total loss or theft of your vehicle.
The two-wheeler IDV is calculated based on the selling price of the manufacturer. The price considered during the calculation is the figure proposed at the beginning of the insurance purchase or renewal. It is then adjusted with the depreciation as per a specific schedule. However, insurance and registration charges of the two-wheeler are excluded from the IDV.
The IDV of the accessories that are not fitted by default from the factory of the vehicle, are calculated separately, at an extra cost to determine if an insurance is required for them.
Two Wheeler Depreciation Schedule:
The depreciation is calculated based on the vehicle’s age and the percentage of depreciation applied on the vehicle.
The depreciation percentage of a two-wheeler is as following:
|Vehicle’s Age||Depreciation Percentage|
|Below 6 months old||5%|
|Above 6 months up to one year||15%|
|Above one year up to two years||20%|
|Above two years up to three years||30%|
|Above three years up to four years||40%|
|Above four years up to five years||50%|
Depreciation above five years on a two-wheeler is calculated based on the serviceable state of the vehicle as well as the condition of its body parts. The overall average amount is calculated from various components of the vehicle to determine the two-wheeler’s IDV. The IDV for a two-wheeler older than five years or an outdated model, is decided after mutual agreement between the insured and the insurer. Some insurance companies refer to surveyors to determine the two-wheeler’s IDV. In such cases, the insured may have to pay an additional cost for the survey.
Importance Of (IDV)Insured Declared Value:
An IDV is basically a compensation amount that is paid to the insured, for the two-wheeler that has been stolen or damaged beyond repair. A rational value must be finalised on, which is close to the vehicle’s market value so that the compensation matches the cost of damage incurred. Typically, insurers offer to decrease IDV in the range of 5% to 10%, as chosen by the customer. Lower IDV would mean a lower premium.
It is important to choose an insurer offering a lower IDV. Therefore, you can compare different insurers by keeping a constant IDV value in your mind. In case of an accident, the IDV decides whether or not the two-wheeler insurance policy is beneficial. At the time of the claim, the age of vehicle is the deciding factor for determining your IDV.