IDV refers to the Insured Declared Value of your car. In practical terms, this is the amount that you as the holder of your motor insurance policy, will receive in case your car gets stolen or suffers a total loss. This is why understanding and getting the right estimate of your car’s insured declared value is essential to reap benefits from any car insurance plan.
How is IDV Calculated?
The Insured Declared Value is calculated based on the manufacturer’s listed selling price minus the depreciation. The Depreciation schedule for IDV is provided for a period of 5 years, depending on motor insurance. IDV for vehicles aged over 5 years is calculated through mutual agreement between the Insurer and holder of the car insurance plan. In case the car is very old, IDV may be arrived at through professional assessments done by surveyors or dealers.
Additional Points Affecting IDV
While getting car insurance, one also needs to check additional factors that may affect the final value. If the vehicle deemed for motor insurance is fitted with accessories not listed in the manufacturer’s price, the insured declared value for these is calculated separately, if insured. Any registration and/or insurance costs will be excluded from the final amount of insured declared value. The maximum insured declared value for a car can be up to 95% of its ex-showroom price.
Why is IDV Important?
Simply put, the insured declared value of your vehicle is the amount you are deemed to get from the insurer. IDV is the maximum sum you can Claim under your motor insurance policy.
Your car’s insured declared value is calculated the moment you get your car insurance. The next time IDV will be calculated is when you renew your car insurance plan. In this way, your car is only covered for its current listing price at any time, under the concerned motor insurance.
Car insurance Premium depends on things such as the type of vehicle, its age, and value. This is why the premium for your car insurance plan will depend highly on the insured declared value calculated. As the value of your car reduces with age, the IDV will affect changes in the motor insurance premium over time.
It is crucial to calculate the correct IDV for your car to prevent being under-insured. If your motor insurance calculates a lower Insured Declared Value, you will not be covered for the full amount you are liable to lose.
It is also essential to know that you can increase your car’s insured declared value as provided by the car insurance plan if your car is well maintained.
Car Insurance Plans come with a variety of coverage and deductibles. Choosing the right mix will give you the most optimum benefits on your motor insurance. There are many car insurance plans available in the market. Some may offer discounts in case of no claims. A comprehensive car insurance plan will ensure that you are covered in case of all eventualities. So make the best use of IDV and get the finest motor insurance for your needs.