The premium amount of your own-damage two-wheeler insurance is determined mainly by the Insured Declared Value. The IDV of the two-wheeler is the maximum compensation the insurance provider will give the policyholder in case of a mishap. The IDV takes into account the depreciation rate of the two-wheeler. Hence, the older the two-wheeler the lower the IDV, this affects both the claim amount and the insurance premium. Thus, as your two-wheeler gets older with every passing year the depreciation rate increases making the IDV, claim amount and premium amount lower.