Have you ever analyzed your two-wheeler’s Insured Declared Value (IDV)? Read this article to learn some crucial details about IDV and find out how it affect your premiums.
The first thing people advise you when you plan to purchase a bike insurance policy is, “Choose a good IDV!” Why is so much of a fuss being made over IDV! It is because the IDV determines how much you can redeem on expenses incurred for repairing the vehicle after the damage post an accident.
If you don’t want to be left in a shock while claiming your insurance amount, then learn how choosing a policy with a good IDV serves your purpose.
The Basics of IDV
IDV or Insured Declared Value is the maximum Sum Assured fixed by the insurer that is provided on theft or total loss of two-wheeler in the event of an accident. IDV in a lay man’s language is the current market value of the vehicle. If your bike suffers a total loss in an accident, or is stolen, IDV is the compensation that you will be provided by your insurer.
Calculation of IDV
The IDV of the vehicle is calculated on the basis of manufacturer’s listed selling price of it. This is the amount that was proposed for insurance at the commencement of insurance/renewal and adjusted for depreciation (as per the schedule given below). However, the registration and insurance costs are not included in the IDV. The IDV of the accessories, which are not factory-fitted are calculated separately at an extra cost if insurance is required for them as well.
The Depreciation schedule of a two-wheeler is as follows:
|If it is not older than six months||5%|
|Exceeding 6 months, but less than 1 year||15%|
|Exceeding 1 years but less than 2 years||20%|
|Exceeding 2 years but less than 3 years||30%|
|Exceeding 3 years but less than 4 years||40%|
|Exceeding 4 years but less than 5 years||50%|