IDV, which stands for its Insured Declared Value in the context of car insurance, refers to the vehicle’s precise market value at any given moment. The insurance companies provide this value as the maximum sum assured as a part of the insurance policy.
Meaning & Importance Of IDV In A Car Insurance
IDV for car insurance is based on the vehicle’s age and current market value. The insurer determines and offers insurance coverage based on the vehicle’s market value. For instance, let’s say there are four different car models. A new or more advanced model will cost more than others. As a result, that model will receive a higher coverage than the others from the insurance provider. The IDV for that car insurance plan will be high as a result.
The Value Of IDV
When a person goes to buy an insurance policy for a car or a domestic four-wheeler, the insurance providers determine the IDV. Following are some reasons why the IDV is crucial for car insurance:
- IDV determines the insurance coverage and, consequently, the premium in car insurance. If the IDV for car insurance is high, the coverage is greater, but the premium cost is also higher. IDV continues to decline, and low IDVs equate to low premiums to be paid. ##
- In the event of damage, the insurers will calculate the costs. In case of total loss, an amount equivalent to the IDV may be paid.
- Higher IDV also denotes higher risk because a car’s market value is higher.
- On occasion, the insured and the insurer will agree to undervalue the vehicle. As a result, the IDV for car insurance is lower. The insurer agrees to forego providing more insurance in exchange for the insured agreeing to pay lower premiums. ##
Claims are subject to terms and conditions set forth under motor insurance policy.
How Is The Insured Declared Value Calculated?
The market value of the car, less the depreciation costs, is used to determine the insured declared value. If the vehicle has extra accessories, it also considers its depreciation value. The following is how e the IDV for car insurance may be calculated.
- A New Car: This will consider the market price the manufacturing company has listed. Subtracting the depreciation expenses, this is the ex-showroom cost.
- Older Vehicles: A similar formula calculates the IDV for old car insurance. It takes into account the same variables as new cars. It is by considering the depreciation value over time and the current market value reported by the manufacturers.
- Additional Car Accessories: The insurers consider the depreciation cost if the car has accessories. In Bajaj Allianz car insurance online, these components’ market and depreciation values are combined to reach the appropriate amount. Whether the vehicle is new or used makes no difference. Make sure you renew your car insurance on time to avail of all insurance benefits. *
Subscribe to Bajaj Allianz General Insurance Youtube Channel here!
* Standard T&C Apply
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.