How IDV is Calculated in Two Wheeler Insurance?

IDV or the Insured Declared value is equal to the sum assured amount that the insured person gets in case your two-wheeler is stolen or declared as a total loss. It is the existing market value of the two-wheeler after deducting the bike registration cost and depreciation value of the two wheeler's parts. Insured Declared Value is derived after the cost of depreciation is deducted from the listing price of the manufacturers along with the cost of accessories minus the depreciation.

Read more
Get Two-Wheeler Insurance
Starting @ only ₹482/year*
  • Save up to 85%

    Lowest 2W Premiums
  • 20+ Insurers

    To Choose From
  • 1.2 Crore+

    Bikes Insured

TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI approved insurance plan. Standard T&C apply

Stay home & renew bike insurance in 2 minutes
No Documents Required
Enter Bike Number
Processing

What is Insured Declared Value in Two-Wheeler Insurance?

Insured Declared Value is the maximum sum assured that the motor insurance company offers when there is theft or if the bike is declared as a total loss after an accident. In simple words, IDV will be same as the current market value of your bike or two wheeler. It is the amount that you will receive against total loss of the vehicle.

Calculation of IDV of the Two-wheeler

The IDV of a new two-wheeler is determined on the basis of the two-wheeler manufacturers listed selling price for your two-wheeler. Whereas, at the time of renewal, the depreciation cost of the parts is also taken into consideration.

The calculation of the Insured Declared Value of the two-wheeler is done on the basis of the manufacturer’s listed selling price, which is proposed at the time of policy inception or renewal and is adjusted for depreciation (as mentioned in the table below).

However, the cost of two-wheeler insurance and registration are not included in the Insured Declared Value. And the calculation of the IDV of the two-wheeler’s accessories that are not company fitted is done separately by paying an extra amount if you want insurance for them as well. Enclosed below is the depreciation table:

You may like to Read: How is No Claim Bonus Calculated in Bike Insurance

Depreciation Schedule of a Two Wheeler

Age of the Vehicle

Depreciation for Fixing IDV of the Two-wheeler ( %)

More than 6 months

5%

More than 6 months and lesser than 1 year

15%

More than 1 year and lesser than 2 years

20%

More than 2 years and lesser than 3 years

30%

More than 3 years and lesser than 4 years

40%

More than 4 years and lesser than 5 years

50%

However, if the two-wheeler is older than five years, then its IDV is determined on the basis of the condition of its parts and its serviceable condition. IDV is adjusted on the basis of the components of different materials, and an overall average is derived to calculate the IDV.

In some cases, the IDV for a two-wheeler, which is older than 5 years or is considered as obsolete may be determined on the basis of mutual agreement between the insured and the insurer.

You may like to Read: No Claim Bonus in Bike Insurance

Importance of Insured Declared Value

It is imperative to rationally settle the IDV of the two-wheeler. It is the amount that you will get as compensation in case the two-wheeler is stolen or it suffers damages beyond repair.

Preferably, it should be equal to the two-wheeler’s market value so if there is any theft or damage, you get compensation accordingly. Some Insurance companies may offer to reduce IDV by about 5 to 10 % that could be selected by the customer.

IDV and Two Wheeler Insurance Premium

Insured Declared Value is one of the most important deciding factors when it comes to two wheeler insurance premium. A higher IDV would attract a higher cost of the premium and vice-versa. So, the next time when you are comparing various quotes from different two-wheeler insurers it is important that you maintain a stable IDV as it will help you choose the right two-wheeler insurance policy.

In a Nutshell

All the above-mentioned factors play a considerable role at the time of buy & renew bike insurance policy. In order to get the right two-wheeler insurance policy, you should be aware of all the details.

Written By: PolicyBazaar - Updated: 23 September 2021

Two Wheeler insurance articles

Recent Articles
Popular Articles
10 Tips to Take Care of Your Bike Before Going On a Road Trip

27 Jan 2022

Almost every bike enthusiast has a dream of going on a long road...
Read more
Own Damage v/s Third Party Cover Under Bike Insurance

25 Jan 2022

In India, an individual primarily prefers a two-wheeler as a...
Read more
Smart Inspection Process for Seamless Claim

24 Jan 2022

With digitalization, everything is possible at the fingertips...
Read more
Renewal of Two-Wheeler Insurance Policy On Time

23 Dec 2021

Two-wheelers are one of the most convenient vehicles and...
Read more
Can Engine Capacity Of Bike Be The Reason Behind Accident Claim Denial?

03 Dec 2021

A road accident took place in Ludhiana, Punjab that led to the...
Read more
Best Two Wheeler Insurance Plans in India
When it comes to choosing the best two wheeler insurance plans, we’re sure you have heard enough from different...
Read more
Traffic Rules in India That Every Two Wheeler Rider Should Know
A two wheeler is probably the first vehicle that most people learn to ride after a bicycle. Nothing ever compares...
Read more
Lost Your Two Wheeler Insurance Documents? Here Is What You Need To Do
A bike insurance policy is one of the important documents required for claim settlement. You won’t be able to...
Read more
How to Renew Two Wheeler Insurance Online in 3 Easy Steps?
Automobile business in India has boomed over time. The automobile sales are skyrocketing. With this rise, there is...
Read more
Zero Depreciation Bike Insurance
Every two-wheeler goes through depreciation. Simply put, depreciation of a vehicle means a reduction in its value...
Read more