Insured declared value

Insured declared value (IDV) is the monetary value of a vehicle as fixed by an insurer. IDV is the current market value of your vehicle, less depreciation. It is the maximum sum insured (amount payable) for your vehicle, in case of total loss or theft.

To arrive at IDV, insurers consider details such as registration year and date, make and model, and the actual price of the vehicle adjusted for depreciation. The rate of depreciation depends on the age of the car. In case of a new car, IDV is usually calculated based on the manufacturer’s listed ex-showroom price, minus 5 per cent depreciation. For vehicles that are more than five years old, IDV is calculated based on the vehicle’s assessment by surveyors from the insurance firm.

Your premium will depend on the IDV. Hence, while some policies may appear cheap, it may solely be due to a lower IDV. So, ensure that you don’t understate your IDV as it could leave you with inadequate cover; overstating the IDV could cost you a very high premium.

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