An IDV calculator is an online tool that helps vehicle owners determine the Insured Declared Value (IDV) of their car. Using an IDV calculator, you can instantly know the ideal premium amount you need to pay towards your car insurance policy based on your car's age, make & model, and rate of depreciation.
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IDV in insurance stands for Insured Declared Value. It is the maximum amount an insurance company pays to the policyholder in case of the complete loss or theft of the insured car. The IDV value is calculated by deducting the insured vehicle's depreciation from the manufacturer's listed selling price based on its age and condition.
IDV does not include the registration and insurance costs. Moreover, any accessories that are not company-fitted are also not covered under the IDV. However, policyholders have the option to include these accessories in their car insurance coverage by paying additional charges.
To calculate the IDV of a car, you can use this simple formula:
IDV = (Ex-showroom price of the car - Depreciation value) + (Cost of accessories - Depreciation on these accessories)
This IDV calculation formula is for a new car equipped with accessories added after purchase. If there are no extra accessories, the IDV calculation is as follows:
IDV = Ex-showroom price of the car - Depreciation value of the car
Alternatively, you can use the IDV calculator for car on Policybazaar.com to check your vehicle's market value.
The car depreciation value is set by IRDAI (Insurance Regulatory and Development Authority of India). Here is the table showing the car depreciation rates for fixing IDV of a car:
| Age of the Vehicle | % Depreciation for adjusting IDV |
|---|---|
| Less than 6 months | 5% |
| 6 months to 1 year | 15% |
| 1 to 2 years | 20% |
| 2 to 3 years | 30% |
| 3 to 4 years | 40% |
| 4 to 5 years | 50% |
For vehicles aged above 5 years, IDV in insurance is calculated by mutual agreement between the insurer and the policyholder based on the vehicle's condition.
Cited below are the key factors that impact a car's insured declared value:
A car's age is one of the most important factors that impact its IDV. The older the vehicle is, the lower its market value, and thus IDV.
Another factor that affects a car's IDV is its type, such as hatchbacks, sedans, SUVs, MUVs, etc., each with unique features and, consequently, different IDVs.
Depreciation on car is the reduction in its market value over time. As a car ages, its value continues to decrease.
The city where a car is registered also influences its IDV. A car registered and running in a metropolitan city faces more risks than one in a tier-2 city, leading to differences in IDVs.
IDV in insurance is extremely important. It not only determines your car insurance premium, but also the claim amount if the vehicle is stolen, involved in a major accident, or declared a total loss. Here are some of the common reasons highlighting the importance of IDV in car insurance:
To check your car's IDV value with IDV calculator online, follow this simple process:
The IDV for a new car is close to its selling price listed by the manufacturer, as a minimum depreciation of 5% is applied to it.
Here are the benefits of using an IDV calculator for cars:
The IDV value of a car has a direct impact on the car insurance premium. A higher IDV means a higher premium amount, while a lower IDV implies a reduced premium. Thus, when you use a car IDV calculator, you can determine an appropriate IDV and the applicable premium rate.
IDV calculator helps you understand the compensation you will receive in case of any unforeseen event. Hence, it gives clarity on how your vehicle's value affects your car insurance premium, so you can choose the right policy.
You can avoid a situation where your vehicle is under- or over-insured by choosing the right IDV through an IDV calculator.
An IDV calculator is an easy and free to use tool. It lets you determine your vehicle's value without involving any manual calculations or the assistance of an insurance expert.
The IDV of a car has a direct impact on the own damage (OD) component of your car insurance premium. Here is how:
Your motor insurance policy is directly linked to your car's IDV. The higher your car's IDV, the higher is its risk, leading to a costly car insurance premium. However, choosing a lower IDV just to cut down on your premium costs is also not recommended.
If you opt for a lower IDV, you may incur significant financial losses if your car gets stolen or completely damaged. This is because your insurer will only compensate you based on the IDV fixed at the start of your policy. Therefore, it is crucial to carefully select the IDV when you renew car insurance. You can also use an IDV calculator to determine the right IDV that matches the true value of your car.
To choose an ideal IDV when you purchase or renew car insurance, consider these important tips:
If you choose a lower IDV for your car, you might end up receiving a lesser amount at the time of claim. Hence, you should choose an IDV that's close to your car's actual market value.
As your car gets older, its market value decreases. Therefore, while choosing an IDV in insurance, consider the future depreciation of your car.
You can use a car IDV calculator online on insurance websites or Policybazaar.com. Simply enter your car details, and this tool will provide an estimated IDV for your car.
It is highly recommended that you provide an accurate IDV for optimal protection. Choosing an incorrect IDV might lead to your claim rejection.
Choosing a higher or lower IDV value for your car has the following pros and cons:
| Nature of IDV | Advantages | Disadvantages |
|---|---|---|
| High IDV |
|
|
| Low IDV |
|
|
Additionally, you can also benefit from no claim bonus in car insurance. NCB is a discount on your car insurance renewal premium when you drive safely and do not make any claims. So, keeping your NCB intact and choosing the right IDV of your car (not too low or too high) can help you save money on your car insurance premiums in the long run.
Also Read: Is Higher IDV Considered Better in Car Insurance?
Ans: You can calculate IDV in car insurance using the following formula:
IDV= (Selling price of the car - car's depreciation value) + (Any purchased accessories - depreciation of accessories).
You can also determine the IDV by using IDV value calculator for car on Policybazaar.com.
Ans: A car's depreciation is based on its make & model, age, registration location, etc. Rates for depreciation are fixed by the Insurance Regulatory and Development Authority of India (IRDAI) and are as follows:
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Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in
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*Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB. Actual time for transaction may vary subject to additional data requirements and operational processes.
+Savings are based on the maximum discount on own damage premium as offered by our insurer partners.
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