IDV in a Car Policy: What Does it Mean?
Tags: insurance, carinsurance
Published: 2023-10-26 11:03:11

The importance of car insurance cannot be underestimated. It is important to carefully consider the technical details of the automobile, such as the engine, mileage, etc., before purchasing an IDV. You should also carefully consider the terms and conditions of the [car insurance policy](https://www.reliancegeneral.co.in/insurance/motor-insurance/car-insurance.aspx). A correctly chosen insurance with the appropriate add-ons can financially protect you and third parties. 

What is IDV (Insured Declared Value)?
The insured declared value (IDV) is the maximum or highest sum you are entitled to from the insurer if your car is irreparably damaged. In this case, your insurer must provide you with the IDV of your vehicle if it is totaled due to damage that cannot be repaired. 
Remember that the asset's owner declares the IDV while insuring it. The higher the IDV, the higher the premium, which directly affects the payable premium.

What are the Factors that Determine the IDV of a Car?
Here are a few things to consider while determining the IDV of a car -

•	Age of the Car
The car's age is one of the key elements that affect IDV. The market value of a vehicle decreases with age. As a result, an older car will have a lower IDV than a new one.

•	Model of the Car
IDVs might differ between car models of the same type, like sedans. This depends on the brand or manufacturer and the amenities available on a specific car model. 

•	Type of the Car
Cars such as hatchbacks, SUVs (Sports Utility Vehicles), sedans, and MUVs (Multi-Utility Vehicles) will all have different values. Thus, a car's type will determine how much it is worth. Compared to sedans or SUVs, hatchback cars are typically less expensive, which means the IDV of hatchbacks will have less IDV than SUVs, MUVs, and Sedans. 

•	Location of Purchase
The price of an automobile varies slightly depending on the region where it is purchased. For example, if you have purchased a car in Mumbai, its IDV would be different in Delhi. 

•	Depreciation
Depreciation is a decrease in a car's market value. The amount of depreciation increases with age. For instance, two vehicles of the same model produced in different years will have different IDVs. 

•	Additional Accessories 
When calculating IDV, accessory depreciation is also taken into account. As a result, its value will fluctuate based on the age and condition of extra accessories in your car.

Which is Best - Lower or Higher IDV?
Choosing a higher IDV is the sensible course of action. When searching for car insurance online, you can modify your IDV within predetermined limits. Check the IDV terms and conditions properly, and confirm with your insurance provider if they will settle claims up to higher IDVs. 

You must always decide to pay the extremely modest premium difference today, barring any financial hardship. Because some complex components in modern cars might even cost tens of thousands, if not lakhs, to repair or replace. Thus, IDV will protect you from any sudden financial loss that might arise from repairing or replacing certain car parts. 

Points to Consider While Calculating the IDV of a Car
Here are a few things to remember while calculating the IDV of a car -
●	Don't lower the IDV to lower the premium, as it will lower the amount of your claim should losses occur. 
●	Avoid over-increasing the IDV because doing so would raise the premium.
●	Don't give an incorrect IDV because doing so might result in claim rejection. 

Car insurance is an expensive long-term investment. You might not receive what you hoped when you filed your claim due to IDV reimbursement deductions. You're undoubtedly already aware of how IDV affects your insurance. You have the legal right to retain the actual IDV of your car. Thus, it is important to keep an eye out for your IDV.