What is IDV in Bike Insurance?


When buying or renewing a two-wheeler insurance policy, you will come across the letters ‘IDV’ at some point. IDV is an abbreviation for ‘insured declared value.’ The IDV forms an important part of a vehicle insurance policy for cars and two-wheelers. Yet, many people are often unaware of what IDV truly stands for and why it is so significant. In this article, we note down for you all that you need to know about IDV in bike insurance.


The definition of IDV

The IDV, or insured declared value of your bike, refers to the current market value of your two-wheeler. This calculation is determined after taking into account any depreciation that has occurred post-purchase. For instance, if you have just purchased a new bike priced at Rs 1.5 lakh, then your two-wheeler insurance policy will also give it an IDV of Rs 1.5 lakh initially. Now, with every subsequent policy renewal, your IDV will drop as your bike to depreciates. So, your next policy might list the IDV as Rs 1 lakh, and the policy after that might turn it to Rs 75,000.

Do note that the insurance company calculates IDV as per manufacturer guidelines and specifications. Essentially, it is the depreciation and resale value that is determined by the manufacturer. The figures in no way indicate the amount you may be able to sell the same bike for. For instance, your bike could be in mint condition and sell for Rs 85,000 whereas the IDV was evaluated to be Rs 75,000.

 


The importance of IDV

The IDV comes into play in the unfortunate event that your bike suffers from total loss or damage. This may happen if it was involved in an accident that has left it irreparable or if the vehicle has been stolen. In either of these two cases, the insurance provider will pay you the IDV after conducting their due investigation.


Factors that are used to calculate IDV

The IDV of a bike is calculated as the ex-showroom cost / current market value minus any depreciation on the two-wheeler’s parts. The final figure is calculated taking into consideration certain factors such as:

  • Registration date of the two-wheeler
  • Model and make of the two-wheeler
  • Type of fuel used in the two-wheeler
  • City of registration of the two-wheeler
  • The type of two-wheeler insurance policy
  • The age of the two-wheeler

Do bear in mind that the IDV in your two-wheeler insurance policy will not include the costs incurred by you for vehicle registration or road tax. If you have fitted any expensive accessories, the value of these may be incorporated into the IDV through separate calculations.

 


Now, the IDV does impact the premium you pay on your two wheeler online insurance policy. A lower IDV means a lower premium amount. This often tempts people to lower the IDV of their vehicle in an effort to save money on their two-wheeler premiums. This is a mistake for if your vehicle undergoes total damage or is stolen, you would not get compensated for what the bike is truly valued at. So, always opt for the highest IDV that you can get – it is really worth the cost.

We hope this article has helped you understand the importance of IDV in your two-wheeler insurance plan. Ride safe!

 

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