What is an IDV (Insured Declared Value)? What are the factors affecting it?

The IDV (Insured Declared Value) of a car is the maximum amount you'll get when you make a claim on your car insurance policy. This is one of the most important cmponents in a comprehensive car insurance plan.

You will be liable to get the highest value of the sum insured only when your car gets stolen or in case of major damage. Your automobile insurance company will calculate the claim amount supported by IDV and other factors. It also helps in calculating the quantity of premium you'll be paying while you buy a car insurance policy. Note that IDV changes every year due to depreciation.

Factors that affect the IDV Value:

In the simple terms, the IDV of your vehicle decreases with age. The older the vehicle, lower is it’s IDV. This is because vehicles are depreciating assets and their value decreases with time. Besides the age, the other factors that affect the IDV value are make and model of the car and the manufacturer.

Buying a comprehensive automobile insurance policy and successively declaring the IDV isn't mandatory by law. However, we highly recommend that you choose a comprehensive policy to enjoy maximum financial protection just in case of a mishap associated with the car.

As mentioned earlier, IDV is the approximate market price 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 impacts your claim amount. Thus, the importance of declaring the right IDV while choosing a car insurance is high.