LEARN MORE ABOUT IDV IN CAR & BIKE INSURANCE

If you are the owner of a car, bike, or commercial vehicle, you might have come across the term IDV. It stands for Insurance Declared Value which helps you find the insurance premiums. IDV also helps you calculate the amount you receive in case of loss or theft of your automobile. In simple words, it reflects the current market value of your vehicle.

In this blog post, we will explore the real meaning of IDV and how it is calculated efficiently with the help of IDV calculators. Moreover, with insurance providers, like Quickinsure, it can be easy for you to understand why IDV matters for your car or bike insurance and how it affects your premium. In addition, this entity also ensures you make smarter decisions by allowing you to compare insurance policies and insuring the right coverage for your vehicle.

What Does IDV in Insurance Mean? And Its Importance

Insured Declared Value represents the maximum amount an insurer will pay in the event of theft or total loss of a vehicle, reflecting its present market worth. IDV is mainly estimated based on one key factor. It is the selling price of the vehicle model and variant, including additional accessories, advertised by the manufacturer at the time of car insurance policy.

IDV is evaluated after adjusting for depreciation each year. If your car is stolen or damaged to such an extent that it cannot be repaired, then the claim amount of the car is calculated using the IDV. Therefore, it is essential for your automobile to be insured for the appropriate IDV.

What is an Insurance IDV Value Calculator?

An IDV calculator refers to the online tool that most vehicle owners use to evaluate the market value of their vehicle. With the help of this tool, they can identify the ideal amount of their car insurance premium based on some factors, including the age of the vehicle, its make and model, and the rate of depreciation.

Why to Use an IDV Calculator?

IDV calculator is necessary for the following reasons:

1.    Accurate Estimation

It provides a precise estimate of your vehicle's market value for insurance purposes.

2.    Fair Premium

The IDV directly influences the premium you pay for your insurance.

3.    Avoid Under or Over-Insuring

It helps you set the right coverage, ensuring you aren't underinsured in case of a claim or overpaying for unnecessary coverage.

4.    Understanding Claims

It clarifies the maximum amount you will receive in the event of a total loss or theft.

Factors that Determine IDV Value

1.    Age of the Vehicle

Since IDV reflects the market value of your car, its age plays a key role. The older the vehicle, the lower the IDV.

2.    Make and Model

The manufacturer, make, and model of your car directly influence its IDV.

3.    Standard Depreciation (As per Indian Motor Tariff)

A car’s value starts depreciating the moment it leaves the showroom. This depreciation rate increases each year, reducing the IDV accordingly.

4.    City of Registration

The city where your car is registered also affects its IDV. For example, vehicles in metropolitan areas often have a lower IDV compared to those in smaller towns or tier-II cities.

IDV in Car Insurance and How Is It Calculated?

The Insured Declared Value of the car is the maximum amount an insurance company pays to policyholders in case their vehicle is stolen or not in a state of repair. This value is evaluated by deducting the depreciation price from the selling price of the vehicle listed by the manufacturer based on its age and condition.

One point to be noted while calculating IDV in a car is that the registration and insurance costs of the car are not included. In addition, any accessories that are not fitted by the company at the time of purchase are not covered under the IDV. However, policyholders can include the costing of these accessories in their coverage by paying an additional amount.

IDV Calculation for Car

The formula to derive Insured Declared Value of the car is mentioned below:

IDV = (Car’s Selling Price – Depreciation value) + (Cost of accessories – Depreciation value of these parts)

This IDV calculation formula is for a new car along with its accessories added after purchase. In case there are no extra accessories, the IDV calculation is as follows:

IDV = Car’s Selling Price – Depreciation value of the car

IDV in Bike Insurance and How Is It Calculated?

You choose the IDV at the time of buying or renewing your bike insurance policy. In simple terms, it’s the maximum claim amount you can get for your two-wheeler in case of total loss.

IDV applies only to the own-damage part of a comprehensive policy, not to third-party insurance. That’s why selecting the right IDV is important. Too low IDV means lower compensation,  and too high IDV means higher premiums.

Generally, the premium for your policy is about 2–3% of the IDV you set. So, a higher IDV increases your premium, while a lower IDV reduces it.

IDV Calculator for Bikes

An IDV calculator helps you know the premium payable for your bike insurance plan. The IDV is calculated by considering your bike’s current market price and subtracting the depreciation value. If you have added extra accessories, their cost (after deducting depreciation) is also included.

Formula for IDV with accessories:

IDV = (Market price of bike – Depreciation) + (Cost of accessories – Depreciation of accessories)

If your bike has no additional accessories, the formula becomes simpler:

IDV = Manufacturer’s listed price – Depreciation

For Example:

Suppose you purchased a bike worth ₹1,00,000 and it is now one year old. With a 15% depreciation rate, the IDV will be calculated as:

IDV = ₹1,00,000 – (15% of ₹1,00,000)

IDV = ₹1,00,000 – ₹15,000

IDV = ₹85,000

So, the IDV of your one-year-old bike will be ₹85,000.

Another example:

If your car worth ₹10 lakh is stolen after 3 years, with 40% depreciation, your claim will be ₹6 lakh (IDV). However, choosing too low IDV could reduce this payout.

Car IDV vs Bike IDV

IDV in Commercial Vehicle Insurance

Commercial vehicle insurance covers a wide range of vehicles, including trucks, buses, vans, and taxis, protecting them against risks like accidents, theft, fire, and natural disasters. It ensures financial security for businesses by covering vehicle damage, third-party liability, and personal accident risks. At Quickinsure, multiple product options cater to diverse commercial needs, including comprehensive, third-party, and package policies, ensuring tailored coverage for every business type. With features like flexible IDV, add-on covers, and easy claim processes, Quickinsure demonstrates its expertise in multi-product commercial vehicle insurance, helping businesses safeguard assets while managing costs efficiently and confidently.

How to Calculate IDV Using an Online IDV Calculator

An IDV calculator is a convenient online tool that helps you determine your vehicle’s IDV without manual calculations. Simply provide the required information, and the tool instantly gives you the result.

Steps to Calculate IDV via GIC Calculator:

Step 1: Visit the gicouncil website.
Step 2: Enter the necessary details, including vehicle type, state, year, month, make, model, and variant.
Step 3: Click on Show Price.
Step 4: Your IDV value will be displayed instantly.

How Does IDV Affect Insurance Premiums?

The Insured Declared Value has a direct impact on your insurance premium. A higher IDV means you’ll pay a higher premium, while a lower IDV reduces your premium. Since your vehicle’s IDV decreases with age due to depreciation, the premium also goes down over time.

A higher IDV is also beneficial when you plan to sell your vehicle, as it indicates better resale value. However, your premium is not only affected by IDVit can also depend on factors like how much you use your vehicle and your past claim history.

When choosing the right insurance policy, it’s important to balance the premium and the IDV. A very low premium might look attractive, but it could be because of a low IDV, which means less compensation in case of total loss. On the other hand, a higher IDV ensures better financial protection.

How to Select the Right IDV for Your Car

Choosing the right IDV is all about finding the right balance between protection and affordability. Here’s what to keep in mind:

1.    Don’t Undervalue

Opting for a lower IDV may reduce your premium, but it can also leave you underinsured at the time of a claim.

2.    Don’t Overvalue

An inflated IDV unnecessarily raises your premium without adding real value.

3.    Use an IDV Calculator

Tools offered by Quickinsure make it easier to estimate your vehicle’s correct IDV. With Quickinsure, you can not only check IDV but also compare premiums across top insurers instantly.

4.    Seek Expert Advice

The experts at Quickinsure can help you choose an IDV that provides the right balance of coverage and cost.

How much can IDV vary

1.    IDV when it is a new car

Basically, IDV in insurance is ideally determined on the basis of the manufacturer‘s listed selling price of the brand and model, minus depreciation attached to it. Typically, depreciation of a new car is assumed to be 5%. So, in turn, the maximum IDV value of a new car would be 95% of its listed price.

2.    IDV when a car insurance policy gets renewed

A car will always remain to be a depreciating asset, which means that the minute it is out of the showroom, its inherent value will start coming down. However, at the time of renewal of the car insurance policy, there exists an opportunity to tweak the IDV, subject to certain terms and conditions. Typically, a window of plus or minus 15% on the earlier agreed upon IDV is permissible.

Vehicle Depreciation Rates for IDV Calculation 

The depreciation rates of bikes and cars are decided by the Insurance Regulatory and Development Authority of India (IRDAI). The below table represents depreciation percentage based on the age of the vehicle:

If your vehicle is more than 5 years old, then the IDV calculation is mutually decided between the insurance company and the vehicle owner based on the vehicle condition. 

Can Declaring a Higher IDV Be Troublesome?

The answer is yes. It is strongly advised against declaring a higher IDV of your insured vehicle, even if you can afford the higher premiums that come with it. This is usually done in the hope of getting a higher claim amount, but is a pointless exercise. At the time of making a claim, the insurance company would consider and compare the road age of the vehicle and attached depreciation. If the IDV would appear to be overstated, only a portion of it would be compensated for and one would have suffered the loss of paying higher premiums.

Final Words

Understanding and calculating the right IDV play a key role in ensuring your vehicle is adequately protected without overpaying on premiums. You can make informed decisions, balance cost with coverage, and safeguard your finances in case of unforeseen events like theft or total loss by using an IDV calculator. With Quickinsure, this process becomes even simpler, offering easy comparisons, transparent options, and expert guidance to help you choose the best insurance policy with the right IDV for your car or bike.

If you are looking to secure your vehicle with right insurance coverage and get the best comparison of insurance policies, Quickinsure is just a tap away! You can also compare Car insurance plans and bike Insurance premiums now, with the help of Quickinsure. 

FAQs

1. What is IDV in car or bike insurance?

IDV (Insured Declared Value) is the maximum claim amount your insurer will pay if your vehicle is stolen or completely damaged beyond repair. It represents the current market value of your vehicle.

2. How is IDV calculated for vehicles?

For cars:

IDV = (Car’s selling price – Depreciation) + (Cost of accessories – Depreciation of accessories)

For bikes:

IDV = (Manufacturer’s price – Depreciation) + (Value of extra accessories – Depreciation on accessories)

3. Does a higher IDV always mean better insurance coverage?

Not necessarily. While a higher IDV gives better claim compensation, it also increases your insurance premium. The ideal choice is to balance affordability with adequate coverage.

4. How does depreciation affect IDV?

Depreciation reduces the market value of your vehicle every year. As your vehicle ages, its IDV decreases, which in turn lowers the premium as well as the claim amount you can receive.

5. Why should I use an IDV calculator before buying or renewing insurance?

An IDV calculator helps you estimate the correct market value of your vehicle, ensuring you don’t end up underinsured (low IDV) or overpaying premiums (high IDV). It makes policy comparison and selection much easier.

6. What happens if I declare the wrong IDV?

Declaring the wrong IDV can lead to lower claim payouts or unnecessarily high premiums. Always ensure the IDV reflects your vehicle’s current market value.

7. How does IDV affect car resale value?

IDV doesn’t directly affect a car’s resale price, which depends on condition and demand. However, an accurate IDV ensures proper insurance, offering financial protection and boosting buyer confidence.

Published on: 09/10/2025