Updated on 2 Jan 2026
The Insured Declared Value (IDV) is simply the current market value of your car. It is the highest amount that your car insurer will offer in case of a total loss, damage beyond repair or theft of your insured car. The IDV of a car should be declared at the time of buying or renewing a car insurance policy. A higher IDV in car insurance means a higher premium for your policy.
With time, owing to depreciation, the IDV of the car reduces. Consequently, car insurance premiums as well as the maximum sum insured also go down. However, even as the IDV decreases over time, there are ways to increase it to get a better sum insured. In this blog, we will discuss ways to increase the IDV of your car so that you are adequately covered in case of complete damage or total loss of your car.
Steps to increase the IDV of a car
Here is how you can upgrade the insured declared value of your car so you don’t miss out on receiving adequate cover:
1. Upgrade your car's accessories
Adding high-quality accessories like alloy wheels or advanced security features can enhance your car's market value. This will subsequently increase the IDV of your car.
2. Install anti-theft devices
Insurance companies offer discounts on policies for cars equipped with anti-theft devices. Installing a GPS tracker, alarm system or immobiliser makes your car safer against potential theft risks and thus increases its IDV.
3. Opt for zero depreciation cover
IDV in car insurance decreases because of the applicable depreciation rates. You can stay cushioned against this reduction in your car’s value by buying zero-depreciation add-ons. This will ensure that your car's IDV remains higher. The car insurance policy will account for the full value without depreciation.
4. Choose a higher IDV during policy renewal
You can choose a higher IDV within the set limits of your sum insured while renewing your car insurance policy.
5. Drive carefully
Safe driving habits can indirectly affect your car's IDV. Drive carefully to avoid accidents and mishaps. This will help you maintain your car better, which can help you negotiate a higher IDV in car insurance with your insurer.
6. Document vehicle modifications
If you have made any significant modifications to your car, such as engine upgrades, make sure you document them properly. These modifications can increase the value of your car. This will increase the car’s insured declared value.
Common mistakes to avoid when setting IDV
Setting an inaccurate IDV for insurance can lead to financial losses at the time of a claim. Here are some of the common mistakes that car owners commit:
1. Overvaluing IDV
Several car owners intentionally increase the IDV in the hope of getting a better payout. But it also means a higher premium and claim disputes or rejection. The insurer will pay for the car at the current market value, so an overvaluation only hampers the process.
2. Undervaluing IDV
Car owners also undervalue IDV to pay a lesser premium. Although it may lower the immediate expenses, doing so can lead to inadequate compensation. The insurer will pay less than the market value, making it tough for you to replace the car with a similar model.
3. Missing IDV renewal
Failing to annually adjust the IDV is a common mistake that leads to lower payouts. Updating the value is crucial to align your car’s value with the market standards.
How IDV impacts your car insurance premium
An IDV directly impacts the insurance premium paid for your car. Any adjustment to the IDV also changes the annual premium payable. A high value increases the premium while a low value decreases it. Additionally, the current IDV affects your claim payout.
That’s why it is important that you calculate the IDV accurately.
Tips to balance IDV and insurance cost effectively
Here is how you can calculate an accurate IDV for your car:
- Understand the actual value: One should know the real-time market value of their car. It helps select the right IDV, or the insurance cost gets affected.
- Estimate future depreciation: Consider the upcoming depreciation so you can choose the IDV that aligns with it.
- Balance cost and coverage: Choose an IDV that offers adequate coverage for the car without excessive premiums. It helps you avoid overpaying and still cover the payout in case of theft or damage.
- Use online tools: Use an IDV calculator to get an estimate of the right value for your car. It will help pay a sufficient premium without reducing the coverage.
Role of car insurance policy in maximising IDV value
The IDV determines the maximum claim in case of total loss or theft. While some car owners choose a low IDV to reduce their premiums, it can hamper their compensation in the future. By choosing a trusted car insurance online and declaring an IDV that reflects your car’s current market value, you ensure better protection and a fair claim payout.
Conclusion
Setting the right IDV helps provide the right protection to your car in the long run. So, it is always recommended not to undervalue or overvalue it and take necessary steps to improve it. Whether you adjust the IDV online or offline, the key is to balance premiums and coverage. That’s why it is best to partner with an insurance company that takes care of your requirements. For personalised guidance, fill out the form on this page, and our experts will reach out to you.
FAQs
1. Is IDV important for car insurance?
IDV makes sure you receive accurate compensation in case the car is severely damaged or stolen.
2. How much IDV is reduced annually?
The IDV depends on a standard depreciation rate, which decreases as the vehicle ages.
3. What happens if IDV is too high?
An overvalued IDV increases the premium cost and may also lead to claim refusal or dispute.
4. Can I sell my car more than the IDV value?
Yes, you can sell your car at a higher value than the IDV, as there is no direct relation between the two.
5. How to calculate IDV in car insurance?
IDV is calculated by reducing depreciation from the vehicle’s selling price and accessories.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.