What Is An IDV In Car Insurance?
When it comes to car insurance, there are many terms that you need to be aware of. Among them, is the IDV. You must have heard people talk about the IDV a lot when a car insurance policy is being purchased or renewed. But what exactly is this IDV? IDV is nothing but the current market price of your car. With time the vehicle ages and its value drops. The insured declared value, or the IDV, is just that.
Why is IDV Important in Car Insurance?
It is very important for you to get the correct IDV of your car. IDV is absolutely crucial in car insurance. This is because the claim you get depends greatly on the IDV of the car. If your car gets stolen or is damaged beyond repair, your insurance provider will pay compensation equal to the IDV mentioned in your car insurance policy. You must note here that the value of the car is not the current ex-showroom price but the IDV of your car. So if you have a Maruti Suzuki Wagon R that is a few years old, you can’t expect to get INR 5 lakhs (its current price for brand new car) for it. The IDV will be considered in this case.
Apart from the claim, the premium also is affected by the IDV. For older cars, the premium of the car insurance policy is lower. This is because as your IDV increases the value of your car drops, your insurance cover also starts becoming lesser. Quite understandably, you pay a lower insurance premium for a policy of a lower value. So this is another area where the IDV plays a huge role.
These are the main reasons why the insured declared value or IDV of your car is so important when you buy your renew your car insurance policy. Make sure your insurance provider makes a correct assessment and you pay your premium accordingly and get an adequate cover too.
IDV and Car Insurance Claim If due to an unfortunate incident your car gets stolen or is completely damaged, you will need to replace it. At such a time, your insurance provider is liable to pay a claim to you, provided you have a comprehensive car insurance policy. However, you will only get the claim amount that is viable with the IDV of the vehicle. If your car is just six months or less old, you can get up to 95% of the value of the car as compensation from the insurance company. On the other hand, if the car is about four years old, you will only get 50% of the value of the car. So even you had a Nisan Sunny and want to continue with the same make and model, you will only get INR 4 lakhs as compensation after four years. The current price of the car is INR 9.5 lakhs, so you have to pay the remaining amount.
This is how the IDV plays out at the time of a car insurance claim. You must therefore be very careful when calculating the IDV. Never buy a car insurance policy before you check the IDV and understand what you are liable to pay as premium and what you stand to receive at the time of a claim.
How to calculate the IDV of a car?
Like most other things, the internet has made it very easy for you to find information about all aspects related to car insurance. You can get a fair idea about the IDV by using a simple internet calculator. Just enter the details regarding your vehicle. These include the model and make of the car and the age of the car. You can use an insurance aggregator’s website to calculate the IDV of your vehicle. Alternatively, you could directly visit your insurance provider’s official website or mobile application and get the job done.
The bottom line
Never ignore the IDV of your vehicle. As you can clearly see from the points mentioned above, there are many components related to car insurance that are directly affected by the IDV. So take some time off to understand the IDV, how and why it is calculated and how it affects your car insurance claims and premiums. Keep the points mentioned above in mind and you will find it easier to grasp the concept. So without any further delay, go right ahead and start looking at the IDV charts and see where your car fits in.