KNOW YOUR CAR IDV EVERYTHING ABOUT YOUR CAR INSURANCE

Insuring your car is a long-term investment. There are many insurance companies with various offers of new policy and policy renewal plans. But before you buy any such policy, you must know everything about the IDV value for the car, because the policy you buy depends on your car’s IDV.

IDV Value In Car Insurance: Why It Is Important?

The full form of IDV is Insured Declared Value.

IDV value in car insurance refers to the market value of your car. It plays an important role when you claim your compensation from the insurance company. It also helps them to determine the appropriate premium price for your car insurance.

The higher the IDV, the higher the premium you pay. And if your car gets stolen or faces damage beyond repair, you’ll receive compensation exactly of the same amount as your car’s IDV. That’s why it’s very important to know the accurate Insured Declared Value or IDV of your car.

IDV Value Calculator For Car: How Can I Calculate My Car’s IDV?

An IDV value calculator for cars is one of the most important tools in car insurance. It helps both the buyer and the insurance company to lock a fair deal of premium and payable amounts during claims.

However, the IDV or the Insured Declared Value decreases as your car gets old. It starts depreciating from the moment of purchasing the car.

You can check the chart below to know your car IDV value:

Car Insurance IDV Value Calculator Chart

Let me make it easier for you. Suppose, you’re buying a car for ₹100. The moment you drive it out of the showroom, its IDV starts decreasing. The depreciation rate for the first six months is 5%. That means the IDV of your car for the first six months is ₹95. Similarly, the IDV of your car after six months of buying will be ₹85, and it’ll remain the same till twelve months or one year from the purchasing date. And if your car’s age is between four and five years, its IDV will be half of its price.

Now the question is, if your car is more than five years old, what will be the IDV of it? Well, if a car is more than five years old, then its IDV depends not on the price of it, but on various things like its condition, the manufacturing company, car model, availability of its spare parts, etc.

Always remember, even the IDV value of a new car depreciates 5% from the price of it. And the older the car, the lower the IDV.

Car Insurance IDV Calculator: What Are The Factors That Help Determining Your Car’s IDV?

Few things have a direct impact on the car insurance IDV value calculator.

• Age of the Car

Your car’s IDV is all about the market value of your car, and the market value highly depends on how old the car is. A new car’s market value is always higher than an old car. A car’s market value decreases as the car becomes older.

• Manufacturing Company

A car’s IDV always depends on its brand, i.e., the manufacturing company of it. The value of the company has a high impact on the IDV rate of the car. For example, a Ferrari will always have a higher IDV than a Honda.

• Car Model

The car model, too, has an effect in its market value, so as in its IDV. It can be caused depending on various things like repairing cost, availability, and price of spare parts, etc. Generally, high-end models have higher IDV because of its higher repairing cost, higher spare parts cost, and higher maintenance cost.

• Standard Depreciation

As per Indian Motor Tariff, your car’s market value starts depreciating from the moment you buy it, and it keeps decreasing. It ultimately affects your car’s IDV.

• City Registration Details

The IDV of your car depends on its registration details too. If your car is registered in a metro city, its IDV may be lower than the same car’s IDV registered on the same day in a tier-II city.

FAQs - Frequently Asked Questions

Q1. Why does the IDV vary between insurance companies?

The premium rates depend on the IDV of the car. So sometimes, the insurance companies keep the IDV low to keep the premium rates low. But it’s always preferable not to go with an inaccurate Insured Declared Value to maintain lower premium rates as lower IDV causes lower compensation amount. And if you decide to sell your car, you’ll get a higher price for your car if it has a higher IDV.

Q2. Is it a good idea to increase the IDV of my car?

Actually, you can have an option of increasing the IDV of your car if you’re buying an insurance policy online. It’ll increase your premiums, but you can claim higher compensation from the insurance company if your car faces any accident or any kind of damage, or it gets stolen.

But I’ll suggest you to put the correct IDV of your car. It’s very hard to fool the insurance companies as they cross check every detail put by the owner before responding to any claim. And it’s very difficult to hide the details from them as there are many other options for the insurance company to check the details.

Q3. What is the IDV value of a new car?

If you have just driven the car outside the showroom, its IDV will be the invoice value of it, minus the minimum depreciation rate applicable. That means, if you’ve bought it less than six months ago, the IDV of it will be the price of the car minus 5% of its price.

Q4. Is it a good idea to go for a lower IDV?

Lower IDV can decrease your premium rates, but can cause difficulties at the time of claiming the compensation.

Suppose, you insure your car at a lower IDV, and your car meets an accident. In that case, you might not get the expected amount from the company. That’s why I would like to suggest you not to lie about your car’s IDV for lower premium rates, because at last it will be your loss! That’s why it is very important to know the real car IDV value of your four-wheeler.