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Consider IDV at the Time of Buying Bike Insurance

You might’ve come across multiple technical jargons in your lifetime. It can be at your workplace or on an insurance website which you were browsing to look for two-wheeler insurance. Insurance jargons may hinder your buying experience owing to the fact that they’re quite confusing. Among the various technical jargons related to insurance, Insured Declared Value (IDV) is one of a kind insurance term, which testifies its influence on your bike insurance. At the time of calculating the IDV, the depreciation value of your vehicles plays an important role. Hence, it is necessary to get familiar with IDV and related terms as well as how it influences your insurance cover.

Let’s start with DEPRECIATION.

Don’t know what’s depreciated value? Fret not, we will explain

What is Depreciation?

Depreciation is the reduction in the value of a vehicle after it is out from the showroom. Owing to wear and tear, a two-wheeler’s actual market value decreases over time. Indian insurance service providers have a complete list of the yearly rates of depreciation to be applied to every vehicle owner.

IDV: Let’s break it down into Simple English

Insured Declared Value, alternately known as IDV, is a Sum Assured, finalised by the insurance company, that is payable to the owner in case of theft or extensive damage to the bike during an accident. In a simple language, IDV is the present market price of the vehicle. If your bike is stolen, or so extensively damaged due to an accident that a repair is not possible, the IDV is paid by the insurer as compensation.

How to Calculate IDV?

IDV is calculated based on the manufacturer’s selling price of the bike and the depreciation value at the beginning of insurance or during renewal. It is calculated after adjusting the depreciated value of the vehicle with the original cost, while insurance and registration costs are excluded.

bike insurance idv

Let’s say, you own IFFCO Tokio bike insurance and your bike is older than 5 years. At the time of renewing the plan, the insurer will decide the new IDV based on your bike’s functional condition and the condition of its body parts, instead of going the above-mentioned process. Moreover, IDV of a Vehicle older than 5 years and/or an out-dated model may be calculated by mutual consent of the insurance company and the policyholder. Some insurers appoint a surveyor to decide the IDV of a particular two-wheeler which may cause additional charges borne by the policyholder.

Here is how IDV is calculated-

Age of the Two-wheeler

% of Depreciation to Finalise the IDV


Within 6 months


More than 6 months but lesser than 1 year


More than 1 year but lesser than 2 years


More than 2 years but lesser than 3 years


More than 3 years but lesser than 4 years


More than 4 years but lesser than 5 years



Why is IDV Important?

IDV is the maximum amount that an insurance company compensates in case the insured vehicle is stolen or damaged beyond repair. Ideally, IDV should be the actual market value of the vehicle, which is compensated in case of theft or damages. The insurance company could offer to lessen the IDV by 5% to 10%, as per the customer preference.

How IDV Goes Hand in Hand with the Insurance Premium?

At the time buying bike insurance, IDV is an essential factor to be considered. It is among the factors that determine the insurance premium. A lesser IDV would lead to a lower premium. This is why it is necessary to consider and maintain a stable IDV value at the time you compare plans online. It benefits you in finding the best policy at an affordable cost.

It’s Your Turn Now!

You may wonder, “Why this fuss over IDV?” The reason is that IDV determines the extent of compensation that the insured can redeem on expenses incurred during the repair of damages post-accident.  It is necessary for you to consider this while buying a plan to avoid surprises at the time of filing the claim. Remember, the higher the IDV, the larger the insurance premium. So, if you wish to opt for a higher IDV, you’ll have to pay a comparatively higher premium than usual. Your insurer may not allow you to increase the IDV as well. In such cases, you can change the insurer at the time of policy renewal and opt for a new plan with a higher IDV. However, it is always better to take a second opinion!