What’s the Significance of Insured Value in Car Insurance? How to Calculate IDV- The Complete Guide
When buying a car insurance plan for the first time, car owners may get confused about some of the important technical terms involved. One of the most important aspects of car insurance is the ‘Insured Declared Value’ or the IDV. This is a concept that people who are not familiar with motor insurance may be unaware of. In simple terms, the Insured Declared Value (IDV) is the current market value of your car, taking into account depreciation due to age, and the physical condition of the car, i.e. extent of scratches, damage, etc. The IDV is extremely significant in car insurance as insurance companies use the IDV value of a car to determine the cost of the insurance premiums that the policyholder will have to pay.
In this blog, Fintra will highlight the following topics:
- How Does IDV Work in Car Insurance?
- How to Calculate IDV of Your Car?
- Factors Used to Calculate the IDV of a Car
How Does IDV Work in Car Insurance?
In terms of insurance, the Insured Declared Value (IDV) is the highest amount of money you can get in when making an insurance claim for your car. Each year the IDV of your car will also go down due to depreciated and any scratches or damage caused to the vehicle. When the IDV of your car is high, the premium of insurance for the car will also be high. When the IDV of your car goes down over the years, the cost of your car insurance premiums will also lower. When you buy new car insurance for your vehicle, the insurance company may appoint a surveyor who will come and inspect your car. After their inspection, the surveyor will provide an assessment for the IDV of your car based on its physical condition.
How to Calculate IDV of Your Car?
Apart from an insurance surveyor who will come to inspect your car and determine the IDV, you can also get an estimate through an online online IDV calculator for car . Here are the steps you can follow to find out your car’s IDV through an IDV calculator:
Step 1: Visit Car IDV Calculator on any reputed insurance provider or aggregator website.
Step 2: You will need to submit information such as the make and model of your car, price of the car, year of purchase, registration details, personal information and other necessary data on the IDV calculator.
Step 3: Make sure you have filled in the data correctly and then click on Enter/Submit.
Step 4: The estimated Insured Declared Value of your car will appear on the website. You may also be presented with an option to view an insurance quote for your car.
Note: The insured declared value presented through an IDV calculator may not be fully accurate but will give you a good estimate of the IDV of your automobile.
Factors Used to Calculate the IDV of a Car
The benefit of insurance is that you can make a good understanding of your premium amount understanding your IDV value and several other important components. The following are the main factors used to identify the Insured Declared Value of a car:
● Age of the Car
The depreciation that is taken into account while calculating the Insured Declared Value is based on the age of the car. The older the car, the higher its rate of depreciation and the lower will be the IDV value.
● Manufacturer and Model of the Car
Your car’s brand and model will also play a big role in determining the correct IDV. For instance, the IDV of a Mercedes car even if it’s a few years old will be higher than a brand new Maruti Suzuki car.
● Physical Condition of the Car
If the car has not been maintained properly and has a lot of internal or external damages, the IDV of the car will be lower. On the other hand, if your car has been maintained so well that it seems like a brand new car, the IDV will be higher.
● Geographical Location
The car’s IDV will also be determined based on your geographical location as the on-road price of the car may vary in different locations.
Conclusion
A car’s IDV is an integral aspect used by insurance companies to help set the premiums for potential policyholders. When you are looking to buy new car insurance, you can also use the online IDV calculators to get an estimate on the IDV of your car and a quote for car insurance online. You can also compare the car quotes offered by different insurance providers and then select which car insurance plan is the right choice for you.
