What is a Insured Declared Value (IDV)?
IDV is the maximum your motor insurer will pay if your vehicle is stolen or written off. It is roughly the current market value after depreciation, not what you originally paid. A higher IDV means a higher payout at total loss but a slightly higher premium.
How IDV works
Each year the IDV falls as depreciation is applied to your vehicle's value. At a total loss (theft or damage beyond economical repair), the claim is settled against the IDV, not the invoice price.
Setting IDV too low to save premium reduces your payout at the worst moment. Setting it fairly at market value is usually the right call.
Example
A three-year-old car with an IDV of Rs 6 lakh is stolen. The claim settles at up to Rs 6 lakh minus any deductible, regardless of the Rs 10 lakh you paid when new.
Common mistakes
- Under-declaring IDV to lower the premium, which cuts the theft/total-loss payout.
- Ignoring that IDV drops every year, which affects renewal payouts.
Frequently asked questions
Is a higher IDV better?
A higher IDV gives a larger payout on theft or total loss for a modestly higher premium. Set it close to fair market value rather than artificially low.