Insured Declared Value refers to the maximum amount an insurer will pay in case of total loss or theft (Car and Bike). It represents the vehicle’s current market value, depreciation, and serves as the sum insured under a policy. IDV is used in claim settlement to determine payout for total damage/theft claims. In this blog, you will learn about the IDV Meaning in detail.
What is IDV’s Meaning in Insurance?
IDV (Insured Declared Value) is the maximum amount the insurer pays (if your vehicle stolen damaged beyond repair). It is the current market value of the vehicle after deducting the depreciation cost. Higher IDV will have a higher premium and coverage, while lower IDV will have a cheaper premium but lower claim payout.
Key Points About IDV
- Claim Basis: IDV is the payout limit for theft or total loss claims (not for minor repairs).
- Depreciation Applied: IDV got reduced with value based on the vehicle’s age.
Example: Suppose you have bought a car for 8 lakh after one year, it will reduce after deducting 15% depreciation cost. After deduction of 15% the current market value of vehicle will be 6.8 lakhs.
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How is IDV Calculated?
IDV is calculated through a simple formula:
(IDV = Manufacturer’s Listed Price – Depreciation + Accessories Value)
Assume: The ex-showroom price of a Car is 10,00,000.
Use the table below to know age-based depreciation.
| Vehicle Age | Depreciation Rate |
| 6 Months | 5% |
| 6 Months to 1 Year | 15% |
| 1-2 Year | 20% |
| 2-3 Year | 30% |
| 3-4 Year | 40% |
| 4-5 Year | 50% |
Let’s assume that your car is 1.5 years old,
10,00,000 – 20% = Rs. 8,00,000
Importance of Insured Declared Value
- Helps in determining the Claim Amount
If you have lost your vehicle or it is fully damaged, calculating the insured declared value ensures fair compensation without underinsurance and overinsurance.
- Impacts Premium
High IDV will lead to a high premium and more coverage. It sets the correct IDV balance and cost of insurance.
- Help Avoid Disputes
A well-calculated IDV minimises disputes during claim settlement both parties agree on the insured value.
- Important for Selling or Buying Used Cars
Insured Declared Value helps evaluate the right market value of a second-hand vehicle. It indicates how much the insurer believes the car is worth.
How to choose the right IDV?
Choosing the right IDV (Insured Declared Value) for the CAR Insurance. You need to maintain a balance between coverage and reasonable premiums. Avoid buying a setting too low or too high IDV. Here are what factors to consider:
- Market Value: Research the current market value of the car. Learn about the car’s make, model, and year.
- Depreciation: You must know that older vehicles will have a lower IDV due to depreciation.
- Condition: If you have a well-maintained car in good condition may have a higher IDV.
- Comprehensive vs. Third Party: Choose whether you want comprehensive coverage (covers both your car and damages) or you want to third-party coverage. Usually, comprehensive coverage requires a higher IDV.
- Premium vs. Claim Amount: A higher IDV means a higher premium, however more coverage in case of a claim. A lower IDV saves on premiums, but could result in insufficient coverage.
- Compare Insurers: Don’t settle for the first insurance quote you get. Compare different insurers to find the best IDV and premiums combinations.
Surepass IDV Calculator API
Manually calculating the IDV value is time-consuming and prone to errors. It’s even become more difficult to calculate multiple vehicles. Surepass IDV Calculator API helps in calculating the IDV value of a CAR, Bike, and Commercial Vehicle. It provides data in real time and make the calculation process quick.
How to use Surepass IDV Calcualtor API?
Input: Enter the vehicle name and mobile number in the API.
Output: Get the following details:
- Vehicle Name.
- New Number Claim Bonus.
- Policy Expired or not.
- Registration Year.
- IDV (Insured Value).
Conclusion
IDV, meaning Insured Declared Value is refers to the current market value of the vehicle. In simple words, it refers to the amount covered by the insurance company when you lose your vehicle or it gets totally damaged. The coverage depends on many factors like age, condition and depreciation value of the vehicle. You can calculate the IDV through the standard formula (IDV = Manufacturer’s Listed Price – Depreciation + Accessories Value). You can take reference from the above example for the calculation. For businesses that have to calculate multiple vehicle IDVS, using an IDV calculator is best. You can use Surepass IDV calculator API to instantly check the IDV value of a Car, Bike and commercial vehicles.
FAQs
What does IDV Mean?
IDV refers to Insured Declared Value, which represents the current value of the car.
IDV full form?
IDV Full Form is Insured Declared Value.
What is IDV in Insurance?
In the vehicle insurance industry, IDV refers to the Insured Declared Value or the current market value of the car.
Is a higher IDV better?
Commonly, higher IDV means higher coverage and higher premiums.
Is there any IDV Calculator for a Car?
You can calculate Surepass IDV Calculator API for Car.
Vijay Kandari
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