IDV is short for Insured Declared Value, and is the value of your car that is insured by your insurance company.

This means that you can only claim the IDV amount from the company in case of an unfortunate event. For example, if you bought your car for 5 lakhs and your insurance cover lists the IDV as 3 lakhs, then you can only claim the latter amount and not more than that.

In fact, the IDV is the maximum amount that a claimant is paid by an insurance company in case of theft, damage or total loss.

The value of your car depreciates each year, and so does the IDV. In the first year, IDV is 85% of the actual value of the car. It becomes 80% in the second year, and depreciates 10% each year thereafter. However, after 5 years, the IDV is decided by the condition and manufacturer of your car.

You can choose the option of getting a zero depreciation cover if you wish to claim the invoice amount of your vehicle.

What happens if you declare a lower IDV to the insurance company?

A lower IDV certainly means a lower insurance premium.

But what happens if you need to claim the insurance amount? You would be at a great loss if your car suffers damages or is stolen. A lower IDV would mean that you would only be able to claim the little amount, and it would be a great financial loss for you.

It is, therefore, recommended that your IDV should always be near to the actual market value of your car.

The TakeAway-

  • The IDV of your car decreases every year.
  • The premium of your car insurance policy depends on the IDV.
  • Always keep the IDV close to the actual market value of your car.
  • The manufacturer, age, model, and accessories decide the IDV of your car after 5 years.