Do find about what is IDV in insurance and when it calculates and find the depreciate value of a vehicle as per the age, points to remember while caluclating the IDV and the formula to calculate IDV in General Insurance…
What is IDV in Insurance
Insured Declared Value (IDV), the sum assured that fixed by insurer, which provides to the client on theft or loss of vehicle. IDV calculates the current market value of your vehicles (Car, Two Wheeler and other) and its parts, in case of any accident the compensation paid by insurer is Insured Declared Value.
The calculation of Insured Declared Value done by subtracting the depreciation value from Manufacturer price of part. If any item which not factory fitted, they will calculate with a different ratio if they added to General Insurance.
The Depreciation Value for a Vehicle
Before going to calculate the Insured Declared Value of a vehicle, you must aware of Depreciation ratio. This is an amount that will deduct from the MRP price as the age of Vehicle grows.
|Depreciation Value||Age of Vehicle|
|30 – 40%||3 Years|
Any vehicle whose age crossed 5 years, the amount of depreciation checked by professional automobiles by monitoring the condition of the vehicle.
Points to Remember while calculating Insured Declared Value
The IDV value of a vehicle does make a major difference sum being assured by insurance, so make sure you keep the below points checked while calculation.
- Value of Car is taken from subtraction depreciation value from actual value of car
- Proper IDV will cost less premium
- Declare the IDV of parts and accessories correctly, to have a rightful claim
- Cross check the IDV set by Vehicle Insurance Provider before confirming
- The premium cost must be directly linked with IDV of car calculated
- Correct value of Vehicle will assure you full return in case of any accident
Calculate Insured Declared Value with New Formula
This won’t be requiring much mathematics knowledge, as you will only be adding and subtracting the product value with a desired value set. Insured Declared Value calculated based on selling price confirmed by manufacturer and the depreciation value depending on age, condition of vehicle.
Insured Declared Value = (Manufacturer Price of Vehicle – Depreciation Value) + (Vehicle Accessories cost – Depreciation Value of Accessories)
The total amount which is calculated using the above formulae will be the amount assured by your insurance provider, and there are many online tools available which let you calculate the IDV based on your provided inputs.
Why Is Insured Declared Value is important?
The IDV is a fixed amount that is agreed by the insurer and client, which will be insurance and during any accident the full IDV amount will be provided to the vehicle owner, and this is a known amount that will be guaranteed return as per agreement made.
Can IDV value Change?
Yes, you can ask for higher IDV value to insurance and after thoroughly checking your checking, and the amount of IDV will be increased but at the same time the premium of insurance taken will be increased, and thus, increase in IDV value will directly get your premium value to increase as per plan selected.