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What is IDV in bike insurance?

Understand the concept of IDV in bike insurance and its significance. IDV refers to the insured declared value of your bike, impacting premium and coverage. Get informed now.

  • 30 Jan 2023
  • 3 min read

Many a time, insurance terminologies are difficult to grasp. However, some jargon, if not understood well, can cause trouble during claim settlement. One such term is IDV or Insured Declared Value. In simple terms, IDV is the maximum claim you are entitled to from your insurer in the event of total loss or theft. IDV also plays an important part in determining your bike insurance premium. Let's go over it in detail.

The rate of depreciation of bike

A bike is a depreciable asset that loses value over time. It is not only a vital factor in determining insurance premiums, but it also influences the reimbursement value during claim settlement. According to the Indian Motor Tariff, the depreciation rates are as follows:

Age of the bike

Depreciation Percentage 

Less than 6 months


Between 6-12 months 


Between 1-2 years


Between 2-3 years


Between 3-4 years


Between 4-5 years


Factors affecting the Insured Declared Value (IDV)

IDV depends upon the following variables:

  • Bike's age
  • Registration date of the bike
  • Place of registration
  • Make & model and variant
  • Fuel type
  • Insurance policy tenure

IDV for two-wheelers aged five years and above

The rate of depreciation increases with the bike's age. As a result, older bikes are less worthy than two-wheelers in their early years. If your bike is more than five years old, depreciation will be calculated making spare parts and serviceable condition a base.

In case you own an obsolete two-wheeler, the insurer will arrive at an IDV after reaching a mutual agreement with you.

Also read:

Why not choose the wrong IDV for the bike?

IDV and the premium for your two-wheeler are correlated. If the IDV rises, so will the premium and vice versa. However, declaring an incorrect Insured Declared Value will result in

  • Declaring a lower IDV for the sake of a lower premium reduces the sum insured value, which in turn lessens the claim value in the event of a mishap.
  • In the event of an accident, you may be required to pay for the majority of the repairs out of your pocket.
  • Declaring a higher IDV raises the premium while preventing you from filing a claim for total loss.

FAQs about IDV in bike insurance

Q.1. How is bike IDV calculated?

The IDV is the maximum amount your insurer will pay in the event of theft or irreparable damage to your two-wheeler. This value is determined by factors such as the make and model of the bike, the registration date, the registration location, and the fuel type.

Q.2. Calculating IDV for a bike without accessories?

You can calculate IDV using the calculator on your insurer's website. If you want to calculate it manually, refer to the formula below:

IDV = Invoice Value of the bike – Depreciation value

You must always refer to the Motor Tariff Act rates for depreciation value.

Q.3. Calculating IDV for a bike with additional or externally fitted accessories?

If you have chosen to instal aftermarket components on your motorcycle, the IDV calculation will be as follows:

IDV = (Invoice value of the bike - Depreciation value) + (Cost of the aftermarket installations – Depreciation value of the aftermarket fittings)

Q.4. Is a higher IDV better for bike insurance?

In most cases, a higher IDV is recommended because it helps you get a decent value in the event of theft or total loss. If you own an obsolete or old bike, declaring a higher value will result in claim rejection. The ideal IDV should be more in line with the bike's current market value.

Q.5. Does IDV matter in bike insurance?

IDV is one of the most important factors in determining the premium for your two-wheeler insurance policy. The cost of insuring your motorcycle is proportional to the IDV. Furthermore, the amount you declare as IDV is what you will receive as compensation if your bike is completely damaged or stolen.

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