How is the value of the vehicle (Insured Declared Value - IDV) determined in a car insurance policy?

The insurance company would determine the value of your car by taking a look at the manufacturer’s listed selling price based on the car’s model, age and brand. Then they would adjust this for depreciation. Remember, the registration and the insurance cost of the insured car are not included in the IDV value.

The cost of any car accessories, which are not fitted by the manufacturer, is also calculated separately at an additional amount if an insurance is required for these accessories. Buying a comprehensive car insurance policy and in turn declaring the IDV is not mandatory by law. However, we highly recommend that you go for a comprehensive plan to get maximum financial protection in case of a mishap related to the car.

IDV is the approximate market value of the car. It is the amount of money you are likely to receive if you raise a claim for a total loss. Also, remember that higher the IDV the higher will be the amount of premium you need to pay for buying the policy. But the adverse effect of undervaluing or reducing this value your claim amount will also decrease and thus you may suffer a loss. Thus, the importance of IDV in car insurance is high.