What Is IDV in Car Insurance?

In the event of theft or complete damage to the car, the insurer makes the settlement basis the Insured Declared Value (IDV) of the vehicle. Know the IDV of your car and why is it important?

Insured Declared Value (IDV)

IDV value of the car is the compensation that the insurer provides to the policyholder on a complete loss of a vehicle. The maximum sum assured is fixed by the insurer as per the current market value of the car minus the depreciation.

How is the IDV value for the car calculated?

  • It is the listed price by the manufacturer
  • The cost of depreciation of the car is deducted from the listed price
  • The depreciation is calculated based on the age of the car
  • The registration cost of the vehicle and the insurance cost are excluded
  • The IDV of the accessories are calculated separately along with their depreciation value in case of new car

The calculation of the Insured declared value (IDV) of the new car is-

Insured Declared Value (IDV) = (the listed price of the manufacturer - Depreciation value of the car) + (Cost of car accessories - Depreciation value of the accessories)


The depreciation rates for determining IDV are:

Age of the car

% of depreciation for IDV

Below 6 months


6 months to below 1 year


1 year to 2 years


2 years to 3 years


3 years to 4 years


4 years to 5 years


If the age of the car exceeds 5 years, the IDV is calculated through a mutual agreement between the insurer and the policyholder.

The mentioned formula becomes even easier if there aren’t any accessories in the vehicle.

IDV= Listed price of the manufacturer- Depreciation value of the car

The depreciation calculation remains the same as per the table in both cases.

To explain the above calculation let’s take an example-

One can get a maximum of Rs. 5 Lakh in case of theft or loss of the vehicle if the IDV of the car was Rs. 5 Lakh when the policy was purchased.

Important things to keep in mind while calculating the IDV for the car

  • The maximum compensation that you would get in case of loss of your car is the actual market price minus the depreciation
  • You would have to pay less premium if the valuation of the IDV is done correctly
  • To decrease the premium, it is never advisable to decrease the IDV of the car as this would mean lesser  value
  • Rightful declaration of IDV would mean rightful claim
  • Before agreeing with the IDV given by the car insurance provider, it is always advisable to have a thorough research
  • Assessing the premium cost compared to each unit of IDV value is necessary

IDV and Premium on Car Insurance

The premium of the car insurance policy is directly proportional to the IDV of the car. As the age of the car increases the premium on the car insurance policy decreases.

IDV on Car Insurance Renewal

When renewing your car insurance plan, it is paramount to determine the cost of the premium basis the IDV of the car. If the market value of the car is higher than the IDV of the car, this would mean paying more premium as compared to the cost of the car.

Determining the IDV of the car wisely is necessary. Quoting a lower value than the actual market value will benefit in terms of paying a lower premium but will have lesser coverage. On the other hand, quoting a greater value is also not recommended as the insurer provides the amount depending upon the type of loss and it may be disappointing when you do not receive the entire coverage amount. You can also use car insurance IDV calculator to get the IDV of your vehicle.

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