What is Insured Declared Value (IDV) in Bike Insurance?

Insured declared value or IDV is the main component of any bike insurance policy. It is the maximum sum insured, which is provided to the insured in case of any theft or total loss of your vehicle in the event of an accident. Thus, IDV is the current market value of your vehicle. Here, the premium for your policy is calculated on the basis of the IDV.

Let’s get to the basics because it is important to know the right IDV to get the best policy.

What Does Insured Declared Value Or IDV Mean?

The maximum amount of money for your bike that you can claim or get reimbursed in case of damage, total loss (theft or bike stolen) and/or constructive total loss (damage beyond repair) is called Insured Declared Value.

In simple words, this is the maximum amount that an insurance company will pay if you lodge a claim for any loss or damage to your insured bike.

It indicates the value of your bike after a particular age. And the Insured Declared Value changes with time. It decreases with vehicle age because of the depreciation factor.

So, the IDV for the new bike will differ than the 3 years of age.

How Insured Declared Value (IDV) Is Calculated

By now, you know that IDV has a direct correlation to your two-wheeler insurance policy, it is quite important to understand how IDV is calculated.

The Insured Declared Value is calculated based on the Ex-showroom price of the vehicle minus the depreciation.

The table below shows the Ex-showroom price considering the depreciation factor.

Depreciation Schedule

Two Wheeler AgeIDV Percentage
Between 0 – 6 months95% of Ex-showroom
Between 6 months - 1 year85%
Between 1 year - 2 years80%
Between 2 years - 3 years70%
Between 3 years - 4 years60%

Insured Declared Value Calculation:

Ex-showroom means the cost that your dealer pays to the manufacturer, including tax and/or excise duty of the state government.

Note: The Ex-showroom price is completely different than the On-Road price buyer pays to the dealer. On-road price includes the cost of the vehicle, road tax and registration charges.

Since different showrooms are located in different places in India, the Ex-showroom price each dealer pays to the manufacturer differs. This mean, different insurance company may keep different IDV of your bike.

In the simplest form, Insured Declared Value = % of the Ex-showroom price

For example, Activa 4g in Mumbai has an Ex-showroom price of Rs. 54,809, after 18 months, the IDV will 80% of the Ex-showroom price = 0.80 x 54,809 = Rs. 43,847 (approximately).

Choosing The Right Policy Means Choosing The Right IDV

It is important to note that the right policy comes when you chose the right IDV for your two-wheeler. As IDV indicates the maximum amount you can claim in case of loss or damage.

For instance, assuming after just 7 months of bike purchase, unfortunately, your bike gets stolen, if you have an insurance policy, the insurance company will pay you based on IDV.

Now, if you have selected an insurance based on lowest premium instead of highest IDV don’t you think it would be a loss? You definitely would like to get the best and the maximum amount as reimbursement.

Important Things To Keep In Mind

  • Choose wisely.
  • Check IDV before you buy
  • Don’t follow the herd: lesser the premium better the policy
  • Understand your policy runs around IDV

For any queries related to bike insurance, feel free to ask us and we would be happy to assist you.

%d bloggers like this: