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What Is IDV in Two-Wheeler Insurance?

If you are familiar with bike insurance plans, you must have definitely come across the term Insured Declared Value or IDV. It is usually visible at the beginning of every two-wheeler insurance quotation and plays a crucial role in determining your insurance premium.

Insured Declared Value is the current market value of your bike after accounting for the depreciation rate. In terms of insurance, it is the maximum amount of money you can claim in case your two-wheeler is damaged beyond repair, lost or stolen within the policy period.

Now that you have understood the IDV meaning in two-wheeler insurance, let’s move on to learn how IDV is calculated.

How Is IDV Calculated for Bike Insurance?

The insurance provider estimates the IDV of your two-wheeler by considering the manufacturer’s listed selling price. Furthermore, the price is adjusted with the depreciation rate of your vehicle to get the IDV of your bike. However, you must note that the Insured Declared Value does not include registration cost and road tax. In case of any accessories that have been fitted later, the IDV for it will be determined separately.

The table below helps you estimate the depreciation rate of your vehicle in terms of the age of the two-wheeler:

Age of Two-Wheeler

Depreciation Rate for IDV Calculation

Less than or equal to 6 months old

5%

Between 6 months to one year

15%

Between 1 year to 2 years

20%

Between 2 years to 3 years

30%

Between 3 years to 4 years

40%

Between 4 years to 5 years

50%

IDV Calculator for Bike

With the help of an IDV calculator for bikes, you can determine the market value of your two-wheeler and the right premium amount for bike insurance. The calculator enables you to get an idea regarding the compensation amount you shall receive in case of theft or complete damage. By inputting the various details required, the tool will offer an estimate of the IDV of your two-wheeler.

Factors That Help Determine IDV in Bike Insurance

Check out the crucial aspects that play a role in determining the IDV value in bikes:

  • Make and Model of Bike

To calculate the IDV of your two-wheeler, the make and model of the vehicle is one of the factors considered. Thus, the more expensive your bike, the higher will be the Insured Declared Value.

  • Age of the Bike

Age is another vital aspect that helps decide the IDV in bike insurance where the older your vehicle, the lower is the IDV.

  • Fuel Type

The fuel type of the two-wheeler also impacts the bike insurance IDV where it depends on whether the bike runs on petrol or diesel.

  • Area of Registration

The state or city of registration of your two-wheeler also influences the IDV in bike insurance. The value may differ for vehicles registered in metropolitan cities in comparison to rural regions of India.

Summarising IDV in Bike Insurance

How to Calculate the IDV of a Bike That Is More Than Five Years Old?

The age of your vehicle is directly proportional to the depreciation rate. This means, the higher the age of the bike, the higher will be the rate of depreciation. For bikes of up to 5 years of age, the depreciation rate is between 5% to 50%.

However, the depreciation rate for two-wheelers that are five years old or more is calculated based on its serviceable condition and the state of its components. In case the components of your vehicle are made of different materials, the Insured Declared Value is calculated accordingly.

For vehicles that are over five years old or an outdated model, the final IDV is mutually decided between you and the insurance provider.

Difference Between IDV and Premium Rates

As the Insured Declared Value and bike insurance premiums are directly proportional to each other, many end up confusing the two. IDV is the current market value of your vehicle while the premium rate is the amount you pay to gain coverage for your bike.

If the IDV for two-wheeler insurance is higher, then the premium of the policy increases and vice versa. However, you shouldn’t opt for the wrong Insured Declared Value for a cost-effective premium as it may impact your claim amount in the future.

What Is the Significance of IDV in Bike Insurance?

The Insured Declared Value is one of the essential components of any bike insurance plan as it helps determine the amount you pay as a bike insurance premium.

  • Estimates the Actual Value of Bike

IDV allows the insurance provider to determine the market value of the bike. To calculate the IDV in bike insurance, various aspects such as the make and the model, age, the cubic capacity, city of bike registration, and more are considered. Hence, you must provide correct information to gain coverage for your two-wheeler.

  • Determines the Bike Insurance Premium

The bike insurance premium depends on several factors such as the type of policy, city of residency, cubic capacity, make and model, claim history, and most importantly the IDV of your bike.

  • Decides the Claim Amount

Technically, IDV is also the highest amount you receive as compensation in case of damage or loss due to unfortunate events. Many people state incorrect IDV, with a hope to lower the premiums. However, it can backfire while making a claim to give lesser compensation, and the amount could be insufficient to cover the loss incurred.

Consequences of Declaring the Wrong IDV for Your Bike

The IDV in two-wheeler insurance is calculated based on the current market value of your vehicle after considering the depreciation. This is applicable while estimating the IDV during insurance policy purchase or renewal.

Thus, it is essential to avoid declaring a lower IDV of your bike than the original market value. In the event of total loss or theft, the insurer shall compensate you an amount lower than the actual sum due to wrongly declared IDV. But why will a policyholder opt for a lower IDV in bike insurance? Because a lower IDV leads to a lower premium, some individuals may prefer to declare a lower IDV without realising how detrimental it can be.

Similarly, it isn’t recommended to declare a high IDV in the hopes of higher compensation. This is because the insurance provider shall account for the depreciation rate at the time of claim settlement. Thus, you won’t receive a higher claim amount due to an increased IDV value in bike insurance.

What Happens to IDV During Bike Insurance Renewal?

When renewing your bike insurance, it is advised to check the premium of the two-wheeler policy and decide whether the IDV quoted justifies the premium amount.

If the value of the IDV is not mentioned in the policy, get in touch with your insurer for the required details. It’s important to remember that the IDV impacts the premium of a comprehensive insurance policy.

Hence, one has to be careful not to understate or overstate the IDV; this would, in turn, be a hassle at the time of claim settlement.

A Final Thought

Bikes are prized possessions and a long-term investment for many vehicle owners and thus, it is essential to have the right IDV. With extensive protection offered by comprehensive two-wheeler insurance, you can make sure your bike is always in the best shape!

Visit Finserv MARKETS today to browse through the bike insurance plans offering coverage against third-party liabilities and own damage. What’s more? The entire process is online, transparent and provides numerous benefits such as 24×7 bike roadside assistance, hassle-free claim settlement, and more!

Check Out Bike Insurance Plans Available at Finserv MARKETS

FAQs of Bike Insurance IDV

  • ✔️Can I increase the Insured Declared Value of my two-wheeler?

    Though many insurers allow policyholders to customise their bike IDV, it is recommended to avoid declaring the wrong value. As the Insured Declared Value is the amount you shall receive on total damage or theft of a vehicle, you must get the rightful compensation by choosing an accurate IDV.

  • ✔️Does the IDV in bike insurance decrease?

     The Revolt RV 300 offers the longest driving range of approximately 180 kilometres when driven in Eco mode.  

  • ✔️Are electric bikes worth it in India?

    No, it isn’t recommended to declare a lower IDV for a lower premium rate as the compensation amount on total loss will not be enough. The claim amount from the wrongly declared IDV value in bike insurance will fall short in covering the loss or damage incurred by your vehicle.

  • ✔️Do third-party insurance plans have an IDV value?

    No, third-party bike insurance policies do not have an IDV value as they only cover third-party liabilities. Hence, it is best to opt for a comprehensive bike insurance plan for extensive coverage from unforeseen risks.

  • ✔️Can I change the IDV in two-wheeler insurance after purchasing the policy?

    You can get in touch with your insurance provider to know if the IDV of your vehicle can be changed or not. Thus, ensure you compare various plans and double-check the Insured Declared Value at the time of purchase.

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