How is the Insured Declared Value (IDV) of my vehicle decided and how does it impact my coverage?
The Insured’s Declared Value (IDV) of the vehicle will be deemed to be the ‘Sum Insured’ and it will be fixed at the commencement of each policy period for each insured vehicle.
The IDV of the vehicle (and accessories if any fitted to the vehicle) is to be fixed on the basis of the manufacturer’s listed selling price of the brand and model of the insured vehicle at the start of the insurance or renewal. The IDV would subsequently change according to the depreciation grid below for each one year block within the policy period for the insured vehicle. All ages of vehicles, provided they have a valid fitness certificate as required by law, will be covered by the aforementioned product.
THE SCHEDULE OF DEPRECIATION FOR FIXING IDV OF THE VEHICLE
| AGE OF VEHICLE |
% OF DEPRECIATION FOR FIXING IDV |
| Not exceeding 6 months |
5% |
| Exceeding 6 months but not exceeding 1 year |
15% |
| Exceeding 1 year but not exceeding 2 years |
20% |
| Exceeding 2 years but not exceeding 3 years |
30% |
| Exceeding 3 years but not exceeding 4 years |
40% |
| Exceeding 4 years but not exceeding 5 years |
50% |
The IDV arrived as per the above method may also be adjusted basis various factors such as location, usage, road type/ terrain etc, with agreement of the insured and as captured in the policy schedule.
The age-wise depreciation schedule shown above is applicable only for Total Loss/Constructive Total Loss (TL/CTL)/Cash Loss claims.
IDV of vehicles beyond 5 years of age and for obsolete models (i.e. models that manufacturers have discontinued) is to be determined on the basis of an agreement between the insurer and the insured.
IDV shall be treated as the Market Value throughout the policy period without any further depreciation for the purpose of Total Loss (TL)/Constructive Total Loss (CTL)/Cash loss claims.
The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and/or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle.
The liability of the Company shall not exceed the Insured's Declared Value (IDV) of the vehicle in the event of total loss/ constructive total loss/cash loss for the year in which loss has occurred. In order to ascertain the Total IDV as on date of loss, Tenure-wise chart is accompanied in the policy schedule.
Insured Declared Value of Car = Manufacturer's listed selling price - Depreciation Value
For instance, if your car is less than 6 months of age and its current market value is Rs. 10,00,000 then at 5% rate of depreciation, the IDV would be around 9.5 lakhs. However, if the car is above 1-2 years, then at 20% rate, the IDV would be 8.0 lakh.
* The above provisions of Insured declared value are in line with the erstwhile India Motor Tariff
What criteria is considered to classify my Insured vehicle as a Total Loss, Constructive Total Loss, or Cash Loss?
The insured vehicle will be treated as a Total Loss / Constructive Total Loss / Cash-loss if the aggregate cost of retrieval and/or repair of the vehicle, subject to the policy's terms and conditions, exceeds 75% of the IDV of the vehicle.
As further guided by the Master Circular on General Insurance business, If a damaged motor vehicle is assessed as being unrepairable and hence a wreck i.e. a ‘total loss’ or ‘write-off’, the Insurer shall grant the Policyholder the option to retain the wreck and accept a ‘cash loss’ settlement (being the IDV less the assessed value of Salvage based on competitive quotes procured by the Insurer including any submitted by or through the Policyholder).
The liability of the Company shall not exceed the Insured's Declared Value (IDV) of the vehicle (including accessories thereon) as specified in the Schedule less the value of the wreck in the event of total loss / constructive total loss/cash loss for the year in which loss has occurred. In order to ascertain the Total IDV as on date of loss, Tenure-wise chart of IDV would be accompanied in the policy schedule.
In case of Total Theft of the vehicle, the liability of the Company shall not exceed the Insured's Declared Value (IDV) of the vehicle (including accessories thereon). However the company shall not be liable for Loss of or damage to accessories due to burglary, housebreaking, or theft unless the vehicle is stolen simultaneously.
* The above provisions for determining Total loss/Constructive total loss /Cash loss are in line with the erstwhile India Motor Tariff and as guided by the Master circular on General insurance products.