While purchasing a car insurance policy, the Insured Declared Value (IDV) is generally 5% of the ex-showroom price of the car. IDV is affected by the following factors:
1. Vehicle’s Age
The age of the vehicle determines the IDV of the car. As the car gets older, its IDV also depreciates. Here is a table showcasing how age affects IDV
| Age of the Car |
Depreciation % |
| 0 – 6 months | 5% |
| 6 months – 1 year | 15% |
| 1 – 2 years | 20% |
| 2 – 3 years | 30% |
| 3 – 4 years | 40% |
| 4 – 5 years | 50% |
| More than 5 years | Mutual agreement |
2. Model of the Car
IDV is also affected by the model and variant of the car. High–end luxury cars have higher IDV than a regular car. SUVs and Sports cars generally have higher IDV than a regular sedan or a hatchback.
3. Registration City of the Car
IDV is also determined by where the car is registered. Metropolitan cities such as Mumbai, Delhi, and Bangalore tend to get higher IDV than tier 1, tier 2 cities and rural areas.
4. Depreciation of Car Components
As a car gets old and depreciates, its components also depreciate. Thus it affects the overall IDV. To avoid this, a zero-depreciation cover add-on is opted. This table showcases how different components depreciate over time.
| Component |
Depreciation Rate |
| Rubber, Nylon, Plastic parts |
50% |
| Tyres and Tubes |
50% |
| Batteries |
50% |
| Fibreglass Components |
30% |
| Glass parts (including windscreen) |
0% |
| Metal parts (painted) |
Based on vehicle age (5–10% a year) |
5. After Market Customisations
After market customisations add to the overall IDV of the car. Make sure to include them while buying four wheeler insurance to increase the IDV and ensure protection of these extra accessories.
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