Your car insurance is the one instrument that comes to your rescue in times of a crisis surrounding your four-wheeler. Hence, it is very important for you to be fully aware of all the factors that impact your car insurance and one such factor is the IDV.
IDV stands for Insured Declared Value. It is a value that determines the maximum compensation you can be entitled to as the insured individual in case of theft or irreparable damage caused to your car. It further helps decide the premium amount you pay in order to get your car insurance or to renew it. The IDV is determined by factors such as your car manufacturer’s listed price, the car’s depreciation value, the cost of vehicle accessories, etc. With all these factors considered, the IDV will determine just how satisfied you can be with you car insurance when the need arises.
How is IDV Calculated?
IDV or Insured Declared Value determines the amount the insurer can provide you with in case of your car getting stolen or if your car undergoes a damage that is irreversible through repairs or replacements. This value is calculated based on the manufacturer’s selling price. The depreciation applied to the vehicle’s parts is deducted from the value. The formula for the calculation looks a lot like this:
IDV = (manufacturer’s listed price – the depreciation value) + (vehicle accessories cost – depreciation value of the parts)
This formula is used to calculate the insured declared value of a vehicle that has added accessories post-purchase of the car. For a car that has no additional accessories included during purchase, you can use an IDV calculator online which utilises the formula that is stated below.
IDV = registered price of vehicle – depreciation value
How to Use An Online IDV Calculate?
A manual calculation can be archaic and exhaustive; therefore, using an online calculator can be your next ebay option. Using an online IDV calculator can get a little tricky but don’t you worry. Given below is a generic guide that can be applied to various IDV calculators across the internet.
Step 1: Enter the brand of the car you drive.
Step 2: Enter the model of your car.
Step 3: Enter your car’s fuel type.
Step 4: At this point, you may be asked about the variant of your car which is manual or automatic. Choose your car’s variant accordingly.
Step 5: Select the year in which you bought your car.
Step 6: Choose the city where your car is registered. For example: MH12 (Pune RTO).
Step 7: State whether you have made any claims in the previous years.
Step 8: Click on ‘Calculate’.
Your approximate insured declared value and your premium amount should be displayed on your screen.
What Should You Consider While Calculating IDV?
Since the insured declared value of a car is a very technical aspect of a car insurance, it is important to thoroughly make oneself aware of all the factors that you should consider while calculating your IDV.
Maximum Compensation
It is crucial to be aware of the maximum compensation you can get from your insurer in case of theft or irreparable damage. The amount that you can receive as compensation is your car’s value minused by the depreciation value of the actual market price. Hence, being mindful about this can help you claim your rightful compensation when you need it most.
IDV to Premium
Not only does the insured declared value affect your maximum compensation amount, it also directly impacts the premium amount you pay in order to purchase or renew your car insurance. Always remember this: the accurate valuation of your insured declared value can bring you smaller premium prices for car insurance policies. Hence, checking whether your premium price has been calculated correctly on the basis of your insured declared value. The higher the premium value, the higher the premium price.
Certain Measures
It is wise to do your research and cross-check with your car manufacturer about your vehicle’s manufacturing value before settling on the IDV and premium price offered to you by an insurance provider. It is important for you to know that you can negotiate to make sure that your coverage and compensations are satisfactory and adequate based on your IDV and premium.
A Quick Run-through
The insured declared value holds a lot of weight when it comes to your car insurance. It determines your insurance’s premium price, the theft or damage compensation you deserve, your coverage, claims and more. You can always use an online IDV calculator to compute your IDV. However, now that you have a detailed idea of how you can manually calculate your insured declared value, you can make sure that you are thoroughly aware of all the parameters that surround your car insurance and its renewals.
