Key Differences Between IDV and Market Value in Two Wheeler Insurance

What is Insured Declared Value (IDV) in Bike Insurance?

When you buy two wheeler insurance, an IDV or Insured Declared Value is the maximum claim payout amount that your insurer agrees to pay if your bike is stolen or declared a total loss. It is calculated as the manufacturer's price minus depreciation based on the age of the vehicle.

IDV directly impacts your bike insurance premium in the following ways:

Higher IDV = higher premium but higher coverage.

Lower IDV = lower premium but smaller claim payout.

To know the step-by-step calculation process of the IDV, check our article on How IDV is Calculated in Two wheeler insurance

What is Market Value in Bike Insurance?

The Market Value (MV) of a bike is the price you would get if you sell it in its current condition in the second-hand market. This usually depends upon various factors, such as mileage, usage, demand for a particular model, and overall condition. This Market Value (MV) fluctuates with demand, condition, and resale trends.

It is not used directly to calculate bike insurance premiums, but it helps assess whether your IDV is realistic.

IDV vs Market Value in Two Wheelers

The table below highlights the difference between IDV and Market Value in two-wheelers:

How Depreciation Affects IDV in Two Wheeler Insurance?

Depreciation is another factor that helps in determining the IDV of a bike. Let's check out the applied rate of depreciation depending on the age of the vehicle:

Why Choosing the Right IDV Matters in Two wheeler insurance?

Here are a few reasons why choosing the right IDV is important in two wheeler insurance:

When you select a higher IDV:

• You pay a higher premium unnecessarily.
• Claim settlement will still be restricted to market-adjusted value.

When you select a lower IDV:

• Premium is cheaper, but it is the case of underinsurance. 
• Claim payout may not be enough to replace your bike.

Hence, choosing the right IDV matters the most, and it is usually close to your bike's current market value, adjusted with applicable depreciation.

You can also check out how both IDV and NCB affect your bike insurance premiums in our article What is IDV and NCB in Two wheeler insurance

Tips to Choose the Right IDV

Choosing the right IDV ensures balanced coverage, neither underinsured nor overpaying on premiums. Here are a few tips that you can use to select the right IDV:

• Compare the insurer's recommended IDV with the market resale value of the same bike model.
• Avoid reducing IDV to lower your premium.
• Include the cost of accessories/modifications.
• Review IDV during the bike insurance renewal, as it is adjusted based on the bike's age.
• Check the depreciation chart before finalising the last IDV.

FAQs –IDV Versus Market Value in Bike Insurance