Introduction to Insured Declared Value (IDV)
Whenever you buy a vehicle you are asked to buy an insurance policy for the vehicle as a form of security. For new buyers a lot of terms regarding this insurance can be confusing, but if you want to gain maximum benefits from it you should be well aware about these terms.
One such term is the Insured Declared Value or IDV which forms an important part of the vehicle insurance as it affects your premium and claim towards the insurance. Through this article we will look at some basics of the Insured Declared Value or IDV to understand this term better.
What is Insured Declared Value (IDV)?
Insured Declared Value or IDV is the maximum amount that your insurer will pay in case of any damage to your vehicle or if your vehicle gets stolen. So basically, Insured Declared Value or IDV determines the maximum claim that you can make towards your vehicle insurance.
IDV also refers to the current market value of your vehicle, so for example the current market value of your vehicle is 2 lakhs, the IDV for your vehicle will be 2 lakhs which will form the maximum amount disbursed by your insurer. Insured Declared Value or IDV is usually determined by adjusting the depreciation every year.
Insured Declared Value or IDV is important because in case of theft or any damage to your vehicle, the IDV will determine the maximum amount of claim you can make which is payable by your insurer. To avail the maximum benefits from the vehicle insurance policy, it is important that your vehicle is insured at the right Insured Declared Value or IDV.
IDV or Insured Declared Value also affects the premiums that you pay for the vehicle insurance. This is another reason that makes IDV important. Many vehicle owners try to set a low Insured Declared Value or IDV to reduce the premium amount. But if the IDV is low, this also means that the claim that you would make in case of theft or damage to your vehicle will also be low.
How to calculate the Insured Declared Value (IDV)?
There are specific calculators used to calculate the Insured Declared Value or IDV of your vehicle, but if you want to calculate the IDV on your own there are two basic formulas that you can use: If there are no added accessories, you can calculate the IDV as, Your Car’s IDV − car’s ex showroom price − depreciation
If there are added accessories, you can calculate the IDV as, Your car’s IDV − (car’s ex showroom price − depreciation) + (cost of accessories − depreciation of the accessories)
