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Insured Declared Value (IDV)

Insured Declared Value is the maximum Sum Assured fixed by the insurer which is provided on theft or total loss of vehicle. Basically, IDV is the current market value of the vehicle. If the vehicle suffers total loss, IDV is the compensation that the insurer will provide to the policyholder.

IDV is calculated as manufacturer’s listed selling price minus depreciation. The registration and insurance cost are excluded from IDV. The IDV of the accessories which are not factory fitted, are calculated separately at extra cost if insurance is required for them. 

The Depreciation Schedule to fix IDV of the Vehicle:

Age of Vehicle

% Depreciation for adjusting IDV

Not exceeding 6 months


Exceeding 6 months but not exceeding 1 year


Exceeding 1 year but not exceeding 2 years


Exceeding 2 years but not exceeding 3 years


Exceeding 3 years but not exceeding 4 years


Exceeding 4 years but not exceeding 5 years


The IDV of vehicles aged over 5 years is calculated by mutual agreement between insurer and the insured. Instead of depreciation, IDV of old cars is arrived at by assessment of vehicle’s condition done by surveyors, car dealers etc.

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How to Calculate IDV?

IDV is calculated on the basis of the selling price that the manufacturer decides and the depreciation on its vehicle’s parts is deducted from it. The formula to derive the actual Insured declared value is mentioned below:

Insured Declared Value = (Company’s listed price – the depreciation value) + (Cost of vehicle accessories - the depreciation value of these parts)

The above-mentioned formula is to calculate the IDV for a new car that is equipped with extra accessories that were added after the purchase of the car. In case you do not have any such accessories in the vehicle, the IDV calculation is simple.  You can easily calculate Insured Declared value of your using the online IDV calculator. And the formula is enclosed below:

IDV = Manufacturer’s registered price – the value of depreciation

The depreciation applicable will be as per the table gave above.

For instance - If your car’s value or IDV is fixed at INR 5 lakh at the time of policy purchase, the insurer will recompense a maximum amount in the event of total loss or damage will be INR 5 lakh. It is imperative to you will get compensation only in case of constructive total loss or in case of theft of the car within the policy term.

Things to Keep in Mind While Calculating IDV

Make sure that you take into consideration the below-mentioned points to carefully assess the IDV of your car-

  • The value of your car is derived by deducting the depreciation value from the actual market price. In any case, it is the maximum compensation that you will get in case of total loss or theft of your car.
  • Correct valuation of IDV may cost you less premium
  • Just to reduce the premium do not reduce the IDV of your car, as this would mean less claim or  a disputed claim
  • Right declaration of IDV would mean rightful claim
  • Do your research or check with the manufacturer before agreeing to the IDV set by your car insurance provider
  • Also, assess the premium cost and check if it has been correctly evaluated on the basis of your car’s IDV
  • It is important that you get adequate coverage and are satisfied with the Insured declared value as it involves a lot of money. You can also negotiate to get the desired IDV.
  • While renewing your car insurance plan, make sure that the cost of the premium is determined on the basis of the IDV. If your car’s market value as compared to the IDV is very high, this would mean exorbitant premium in comparison to a car that costs lower.

You can also fix your car’s IDV online, but this will vary from one insurer to another. It also gives you an opportunity to adjust your IDV while renewing your car, so make sure that you don’t miss a chance.

Why is IDV important?

As explained, IDV is the amount that you will get in case your vehicle is stolen or suffers total loss. It is highly recommended to get IDV which is near the cost of market value of car. Insurers provide with range of 5% to 10% to decrease IDV which could be chosen by customer. Less IDV would attract less premium.


Ultimately, the Insured Declared Value plays an important role in determining the premium of your car at the time of purchase and renewal both. It is important to mention the correct IDV; otherwise, it may hamper your claim process. You can get great deals from a number of insurance providers and they can also help you find the best possible option. You can compare all the possible options and after then you can make an informed decision. This way you will save yourself from paying high premium costs and you can get the best value for your car.

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