1. What is IDV in Car Insurance?

IDV (Insured Declared Value) is the maximum amount your insurer will pay if your vehicle is stolen or damaged beyond repair. It represents the current market value of your vehicle and is the basis for calculating your premium.

2. How IDV is Calculated

The standard formula for calculating IDV is:

Where:

• Manufacturer's Price — The original ex-showroom price of the vehicle
• Depreciation — The value lost due to age and usage of the vehicle

Depreciation Rates: Typically follows a standard schedule based on vehicle age:

• 6 months old: 5% depreciation
• 1 year old: 15% depreciation
• 2 years old: 20% depreciation
• 3 years old: 30% depreciation
• 4 years old: 40% depreciation
• 5+ years old: 50% depreciation (varies by insurer)

3. Importance of IDV Calculation

Details: IDV is crucial because:

• It determines your insurance premium (higher IDV = higher premium)
• It's the maximum amount you can claim for total loss or theft
• It affects the claim settlement amount for partial losses

4. Using the Calculator

Tips:

• Enter the original manufacturer's price of your vehicle
• Enter the depreciation amount based on your vehicle's age and condition
• The calculator will show the current IDV of your vehicle

5. Frequently Asked Questions (FAQ)

Q1: Should I choose a lower IDV to reduce premium?
A: No, underinsuring your vehicle may lead to inadequate compensation in case of total loss.

Q2: How often should I update my vehicle's IDV?
A: IDV should be updated annually to reflect current market value and depreciation.

Q3: Does IDV include accessories?
A: Factory-fitted accessories are included, but aftermarket accessories need separate declaration.

Q4: Can I negotiate IDV with my insurer?
A: Some insurers allow minor adjustments, but IDV is generally calculated using standard depreciation rates.

Q5: How does IDV affect zero depreciation cover?
A: Zero depreciation cover still uses IDV as the maximum claimable amount, but without deducting depreciation for parts.