IDV Calculator

An IDV calculator is an online tool that vehicle owners can use to 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 factors such as the car's age, make & model, and rate of depreciation.

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What is IDV in Car Insurance?

The Insured Declared Value (IDV) in car insurance is the maximum amount an insurance company pays to the policyholder if their insured vehicle is stolen or suffers a total loss. This value is calculated by deducting the insured vehicle's depreciation from the manufacturer's listed selling price of the car based on its age and condition.

The registration and insurance costs are not included in IDV. 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.

How to Calculate IDV of Car?

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.

Standard Car Depreciation Rates for IDV Calculation by IRDAI

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:

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.

How to Check IDV Online with IDV Calculator?

To check your car's IDV value with IDV calculator online, follow this simple process:

• Step 1: Visit the 'IDV Calculator' page on Policybazaar.com.
• Step 2: Enter your car's registration number.
• Step 3: Select your vehicle details like make, model, fuel type, variant, and registration year.
• Step 4: Now, click 'Check IDV' to get the recommended IDV for your car.

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.

Benefits of Using IDV Calculator for Car

Here are the benefits of using an IDV calculator for cars:

• Accurate Premium Amount: 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.
• Estimate of the Compensation: 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.
• Prevents Selecting Incorrect IDV: You can avoid a situation where your vehicle is under- or over-insured by choosing the right IDV through an IDV calculator.
• Saves Time and Effort: 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.

What Factors Determine the IDV of a car?

Cited below are the key factors that impact a car's insured declared value:

• Vehicle Age: 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.
• Make and Model: 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 Value: Depreciation on car is the reduction in its market value over time. As a car ages, its value continues to decrease.
• Location of Registration: 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.

Why is it Important to Choose the Right IDV?

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.

Advantages and Disadvantages of Setting High or Low IDV

Choosing a higher or lower IDV value for your car has the following pros and cons:

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.

How to Choose the Right IDV for Your Car?

To choose an ideal IDV for your car, consider these important tips:

• Don't Underestimate Your Car's Value: 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.
• Think About Future Depreciation: As your car gets older, its market value decreases. Therefore, while choosing an IDV in insurance, consider the future depreciation of your car.
• Use Online IDV Calculators: 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.
• Ensure Adequate Coverage: It is highly recommended that you provide an accurate IDV for optimal protection. Choosing an incorrect IDV might lead to your claim rejection.

Also Read: Is Higher IDV Considered Better in Car Insurance?