IDV Calculator

An IDV calculator is an online tool that vehicle owners can use to determine the market value of their vehicle. With this tool, they can estimate the ideal amount for their car insurance premium based on factors such as the vehicle's age, make and model, and rate of depreciation.

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What is IDV in Car Insurance?

The Insured Declared Value (IDV) is the maximum amount an insurance company pays to the policyholder if their insured vehicle is stolen or suffers a total loss. This value is calculated by deducting the insured vehicle's depreciation from the manufacturer's listed selling price of the car based on its age and condition.

The registration and insurance costs are not included in IDV. Moreover, any accessories that are not company-fitted are also not covered under the IDV. However, policyholders have the option to include these accessories in their coverage by paying additional charges.

How to Calculate IDV for Car Insurance?

IDV is calculated based on the selling price of the car decided by the manufacturer, considering its depreciation. The formula to derive the insured declared value is mentioned below.

IDV = (Car’s selling price - Depreciation value) + (Cost of accessories - Depreciation value of these parts)

This IDV calculation formula is for a new car equipped with accessories added after purchase. If there are no extra accessories, the IDV calculation is as follows:

IDV = Car’s selling price - Depreciation value of the car

Alternatively, you can use the IDV calculator for car on Policybazaar.com to check your vehicle's market value. Here is the simple process:

• Step 1: Enter your car's registration number.
• Step 2: Select your vehicle details like make, model, fuel type, variant, and registration year.
• Step 3: Now, click 'Check IDV' to get the recommended IDV for your car.

Car Depreciation Rates for IDV Calculation

The depreciation value of a car is set by the Insurance Regulatory and Development Authority of India (IRDAI). Here is the table showing the car depreciation rates:

For vehicles aged above 5 years, IDV is calculated by mutual agreement between the insurer and the car owner based on the vehicle's condition.

Factors that Determine the IDV of a Car

Cited below are the key factors that impact a car's insured declared value:

• Vehicle Age: A car's age is one of the most important factors that impact its IDV. The older the vehicle is, the lower its market value, and thus IDV.
• Make and Model: Another factor that affects a car's IDV is its type, such as hatchbacks, sedans, SUVs, MUVs, etc., each with unique features and, consequently, different IDVs.
• Depreciation Value: Car depreciation is the reduction in its market value over time. As a car ages, its value continues to decrease.
• Location of Registration: The city where a car is registered also influences its IDV. A car registered and running in a metropolitan city faces more risks than one in a tier-2 city, leading to differences in IDVs.

Why Should You Care About Your Car’s IDV?

Your motor insurance policy is directly linked to your car's IDV. The higher your car's IDV, the higher is its risk, leading to a costly car insurance premium. However, choosing a lower IDV just to cut down on your premium costs is also not recommended.

If you opt for a lower IDV, you may incur significant financial losses if your car gets stolen or completely damaged. This is because your insurer will only compensate you based on the IDV fixed at the start of your policy.

Therefore, it is crucial to carefully select the IDV while renewing car insurance. You can also use an IDV calculator to determine the right IDV that matches the true value of your car.

Advantages and Disadvantages of High/Low IDV

The table below lists the advantages and disadvantages of choosing a higher or lower IDV for your car:

How to Choose the Right IDV for Your Car?

Here are a few tips you can consider to select an ideal IDV for your car:

• Don't Underestimate Your Car's Value: If you choose a lower IDV for your car, you might end up receiving a lesser amount at the time of claim. Hence, you should choose an IDV that's close to your car's actual market value.
• Think About Future Depreciation: As your car gets older, its market value decreases. Therefore, select an IDV considering the future depreciation of your car.
• Use Online Tools: You can find car IDV calculators online on many insurance websites or Policybazaar.com. Simply enter your car details, and this tool will provide an estimated IDV for your car.
• Ensure Adequate Coverage: It is highly recommended that you provide an accurate IDV for optimal protection. Choosing an incorrect IDV might lead to your claim rejection.