IDV or Insured Declared Value is known as the current price of your vehicle in the market. Simply defined, it means that it is the maximum amount the insurance provider will pay you as compensation in case of damage or theft of the vehicle.
IDV in car insurance gets calculated keeping the following factors in consideration:
- Model of the vehicle
- Age of the vehicle
- Condition of the vehicle
- Making of the vehicle
IDV in a car insurance policy is usually higher if the vehicle is newly purchased. It decreases as the vehicle’s age increases.
Depreciated IDV meaning
Depreciated IDV means the depreciation or reduction caused in the amount of your vehicle. The value of the vehicle reduces with its wear and tear and advancements and trends in the market. While calculating IDV in car insurance, this reduction is considered. This IDV is applied to the actual cost of the vehicle to finalise the amount of depreciated IDV.
The depreciated IDV gets calculated with the help of a simple formula:
Depreciated IDV = IDV - Depreciation Amount
As far as the depreciation amount is concerned, the rate is standardised and provided under the Motor Tariffs Act.
The following components of the car are taken into consideration while calculating the IDV in your car insurance policy:
The category of the vehicle determines its IDV, such as SUV, MUV, sedan or hatchback. Moreover, SUVs have higher IDV values than sedans, which have higher IDV values than hatchbacks.
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Make and model of the car
The brand and the model of the car directly impact the IDV. Different brands have different values within the same vehicle type.
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Age and depreciation cost
The age of the vehicle and depreciation cost directly impact the IDV value of the car. New vehicles have higher IDV and less depreciation cost, and vice versa.
The place where the car is registered also affects the car’s IDV because of the varying showroom prices of the car company across the region.
Even the accessories you add to your vehicle get depreciated over time. This depreciation in the added accessories is also taken into consideration while calculating the IDV.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the relevant industry. It is advised to verify the 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.