The car you possess is your prized possession. It is your source of happiness and transportation. Has the thought of losing it ever crossed your mind? It would definitely have. But did you do anything about it? Probably not, since most people are aware of car insurance but not an important aspect of it that is IDV.
An Insured Declared Value (IDV) may be intimidating to hear but is really easy to understand. It basically refers to the current market value of your car. To make it clearer, it is the amount that you can avail for your car.
Fixed by the insurer, IDV is a maximum Sum Assured that is offered by the insurer on the occurrence of loss or theft of the car. It is the compensation that will be provided to the policyholder if the vehicle suffers a major loss.
The IDV in Car Insurance is an essential aspect that aids the insurer to determine the correct amount of claim. In addition, it also helps the insurer to accurately calculate the premium price for your car insurance.
The calculation of IDV is done on the basis of the selling cost that is determined by the manufacturer. From the total sum, the depreciation on parts of the vehicles is deducted. The formula to acquire the Insured Declare Value is as follows:
IDV= (Listed Price by the Company- Depreciation Value) + (Vehicle accessories cost- the depreciation value of the parts)
The formula mentioned above is to calculate the IDV for a new car that includes accessories that are added on after the purchase. In case, your car does not have additional accessories, the calculation is even more simple.
The calculation can be easily done via an online IDV calculator. However, we also provide you with the formula for you to have knowledge of it:
Insured Declare Value= Price registered by the manufacturer- the value of depreciation
There are certain factors that help determine IDV for your car insurance. They are as follows:
With the above information, get well acquainted with the IDV in Car Insurance and take well-informed decisions.
Are you looking for a new insurance policy or a policy renewal? Reach out to us and let us assist you.