How To Calculate The IDV Value of A Two-Wheeler?
The term "Insured Declared Value" refers to the market value of your two-wheeler.. IDV is only available under the ‘Comprehensive two-wheeler Insurance Policy.' IDV measures the two-wheeler's depreciation based on the "manufacturer's requirements" or "the price the manufacturer prices your two-wheeler at," not the value you would sell it for later.
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The IDV is a term that is often misunderstood, in terms of two-wheeler insurance. What is IDV and why is it so critical for the safety of your two-wheeler? Let's take a look at an IDV in two-wheeler insurance and see what you need to remember.
What Is IDV In Two-Wheeler Insurance?
After depreciation, the insured declared value of your two-wheeler is what it is worth in the market. Let's take a simple example: let's assume you spend Rs 1 lakh on a brand-new two-wheeler (excluding the cost of registration, road tax, insurance, accessories et al.). Since your two-wheeler is brand new, your IDV at the time of purchase will be 1 lakh.
However, as your two-wheeler ages, its value decreases, and the IDV decreases as well.Finally, we arrive at the stage where the majority of people become confused. IDV measures your two-wheeler's depreciation based on the "manufacturer's requirements" or "the price the manufacturer prices your two-wheeler at," not the value you would personally sell the two-wheeler for. For example, someone can try to buy your two-wheeler for Rs 85,000, but the IDV would stay at 65,000.
How To Calculate The IDV Value Of A Two-Wheeler?
So, another year has passed, and it's time to renew your cherished two-wheeler's insurance once again. The majority of us simply pay the insurance premium and move on. But do you know how much your two-wheeler is worth in total? Do you know how much money you'll get back if your motorcycle is stolen or, worse, ruined beyond repair?
That's what the IDV, or Insured Declared Value, is for. IDV stands for Insured Declared Value, and it's simply the market value of your two-wheeler. IDV is only valid if you have a ‘Comprehensive two-wheeler Insurance Policy.'
IDV Calculator For Two-Wheeler
The formula for calculating your IDV is straightforward: It's the two-wheeler's ex-showroom price/current market value minus depreciation on its parts. The IDV does not contain the costs of licencing, road tax, or insurance. In addition, if attachments were added later, the IDV of those parts would be determined separately.
What Factors Are Considered In Determining A Two-Wheeler's IDV?
Since your IDV represents the market value of your motorcycle, the following are some factors considered when determining the IDV:
- Your two-wheeler's make and model
- Your two-wheeler's registration date
- The city in which you registered your two-wheeler
- The type of fuel that your two-wheeler uses
- Your two-wheeler's age
- Type of two-wheeler insurance
- Period of your two-wheeler policy
How Do You Find Out The IDV Of A Two-Wheeler That's Over Five Years Old?
With two-wheeler insurance, they measure the IDV using the manufacturer's sale price and depreciation. The depreciation of the same goes from 5% for a relatively new two-wheeler to up to 50% for a two-wheeler that is 4 to 5 years old until up to 5 years.
However, if your two-wheeler is older than 5 years, the insurer can determine the IDV for you. In this scenario, the insurer will primarily base their decision on the state of your two-wheeler and its components.
Also Read:- Bike Insurance Policy - When & How Should You Change It?
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
