IDV Calculator
Precisely calculate your car's Insured Declared Value (IDV) with our free online tool. Get an accurate vehicle valuation for informed car insurance decisions...
functions Mathematical Formula
\text{IDV} = \text{Original Purchase Price} - (\text{Original Purchase Price} \times \text{Depreciation Rate})
\text{Depreciation Rate} = \begin{cases} 5\% & \text{if age} < 6 \text{ months} \\ 15\% & \text{if } 6 \text{ months} \le \text{age} < 1 \text{ year} \\ 20\% & \text{if } 1 \text{ year} \le \text{age} < 2 \text{ years} \\ 30\% & \text{if } 2 \text{ years} \le \text{age} < 3 \text{ years} \\ 40\% & \text{if } 3 \text{ years} \le \text{age} < 4 \text{ years} \\ 50\% & \text{if } 4 \text{ years} \le \text{age} \le 5 \text{ years} \\ 50\% & \text{if age} > 5 \text{ years (capped)} \\ \end{cases}
What is IDV?
IDV stands for Insured Declared Value. It is the maximum amount an insurance company will pay out in the event of your vehicle being stolen or deemed a total loss (damaged beyond repair). Essentially, it represents the current market value of your vehicle at the time of policy inception, minus depreciation.
How is IDV Calculated?
The IDV is calculated based on the manufacturer's listed selling price of the vehicle, including the cost of accessories (if any), at the time of policy initiation. This value is then adjusted by deducting depreciation based on the age of the vehicle. Standard depreciation rates are set by regulatory bodies and increase with the vehicle's age, typically capping at 50% for vehicles older than 5 years.
Factors Affecting Your IDV
- Age of the Vehicle: The older your car, the higher the depreciation, leading to a lower IDV.
- Make and Model: Popular models may retain value better, but general market demand and availability of parts play a role.
- Ex-showroom Price: The original price of the vehicle forms the base for IDV calculation.
- Accessories: Non-standard fittings or accessories are often added to the ex-showroom price before depreciation.
- Location of Registration: Regional factors and varying taxes can subtly influence initial pricing.
Why is Correct IDV Important?
Having the correct IDV is crucial for comprehensive motor insurance. If your IDV is too low, you risk receiving inadequate compensation in case of total loss or theft. Conversely, if your IDV is too high, you might pay higher premiums unnecessarily. An accurate IDV ensures fair compensation, reflecting the true market value of your vehicle, protecting your financial interests.
Frequently Asked Questions
What happens if my car is more than 5 years old?
For vehicles older than 5 years, the IDV is generally not subject to a fixed depreciation chart. Instead, it is determined by mutual agreement between the insurer and the insured, based on the vehicle's condition and market value, often capped at 50% of the original ex-showroom price.
Can I choose a lower or higher IDV?
While you might have some flexibility (typically +/- 5% of the calculated IDV), insurers prefer the IDV to accurately reflect the vehicle's market value. Choosing a significantly lower IDV reduces your premium but might lead to insufficient compensation. A much higher IDV increases your premium without guaranteeing a higher payout, as it's still subject to market value assessment at the time of claim.
Does IDV include registration and road tax?
No, the Insured Declared Value (IDV) typically does not include the cost of registration fees or road tax. IDV primarily covers the ex-showroom price of the vehicle and any fitted accessories, representing the cost to replace the vehicle itself, not the administrative charges associated with its ownership.
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