What Is Insured Declared Value In Car Insurance?
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Insured Declared Value is the backbone of your car insurance policy. Your vehicle's insurance premium is based on its IDV. Car insurance premiums are based on the IDV of a car. Hence, it is not advisable to understate the IDV of your vehicle, as the loss will be your responsibility in the event of damage.
What does IDV mean in Shriram Car Insurance?
If an individual’s car is stolen or gets damaged, the Insured Declared Value (IDV) is used to figure out how much they can claim on their insurance. To make it simple, the IDV is your policy's maximum sum assured for covered damages to your car.
So, an individual must have a proper Insured Declared Value if they want the claim settlement to go seamlessly.
How is the IDV calculated?
The insurance company decides the Insured Declared Value of your car by looking at the selling price, car's brand, model and age listed by the car's manufacturer. Then, the selling price is depreciated due to wear and tear. This gives the true IDV of the insured car.
The Insured Declared Value doesn't take the costs of insurance and registration into account. The insurance company and the insured person must agree on the IDV of the car.
Importance of Insured Declared Value?
People who own cars often think about lowering their IDV in order to save on their premiums. But you should know that if your car is stolen or totally damaged, a lower IDV could mean a lower payout. This can be very frustrating. When purchasing or renewing your car insurance policy, it is critical that you use an Insured Declared Value calculator and enter the proper IDV for your vehicle.
Things that help find the IDV
Rate of depreciation: The market value of the car starts to go down as soon as you buy it. The Insured Declared Value is calculated with the help of the depreciation rate.
Age of the car: The age of your car is a very important factor. The higher the rate of depreciation, the lesser the Insured Declared Value will be.
Make and model of your car: The make and model of your car affect how much it will cost to fix if it breaks down. So, the IDV of Mercedes cars will be higher than that of Maruti cars.
IDV for Older Cars
Depreciation in simple terms means the wear and tear of the vehicle. Meanwhile, the premium for damage coverage goes down as the age of the insured vehicle increases.
The Insured Declared Value is different for cars that are 5 years old. Following parameters are used to determine the used car’s IDV
- Car make, model and variant
- Year of registration
- Spare parts availability
How do you know if your IDV should be high or low for car insurance?
Having the right IDV is the key to getting the most out of your car insurance policy. However, those unfamiliar with car insurance sometimes find themselves unsure about whether to choose a higher or lower IDV. The correct response to this question is neither. The IDV on your car insurance policy shouldn't be too low or too high.
Understanding your car's accurate, current market price is important. Use this cost as a starting point when figuring out the IDV for your car insurance policy.
When should you buy a higher IDV car insurance policy?
As we've already said, your car's IDV should have the right amount for your insurance policy to cover the most. But there are times when you might want to increase the IDV. For example, if you are:
- Having a luxurious car.
- Your car's spare parts are difficult to find or cost a lot.
- You need more protection and are ready to pay more for it.
If an individual set their car's IDV lower, they will get less money if it gets stolen or totally lost. A total loss happens when a car is substantially damaged and the repair cost exceeds the car's worth. In this case, the insurer will pay them the IDV amount they set when they bought their car insurance policy.
But some car owners would rather set a lower IDV if they are in one of the following circumstances:
- If they have an old car that isn't worth much.
- If they have a certain amount of money set aside to buy car insurance.
- If they are willing to give up some very important benefits and coverages that come with car insurance.
Shriram General Insurance will help you to drive your dream car with confidence. Our staffs are completely responsive and will give support in time with a 24/7 claim notification service. All inquiries will be addressed in a timely manner. So, purchase or renew a Shriram Car Insurance policy online right now.
1. What's the best IDV for cars?
The best IDV for a car or any other car is the one that is closest to its current market price.
2. Why does a car's IDV go down each year?
Car’s IDV goes down every year because its market value goes down every year. This happens because the value of the car goes down with time and use.
3. What will a new car's IDV be?
Ideally, the IDV of a new car should be the same as its invoice value. It's important to remember that any vehicle sold for use will experience depreciation, even a brand-new one.
- People who own cars often think about lowering their IDV in order to get a lower premium. But you should know that if your car is stolen or totally damaged, a lower IDV could mean a lower payout.
- Having the right IDV is the key to getting the most out of your car insurance policy. However, those unfamiliar with car insurance sometimes find themselves unsure about whether to choose a higher or lower IDV.
- The insurance company gives the Insured Declared Value of your car by looking at the selling price, car's brand, model and age listed by the car's manufacturer.
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