Understanding of the Insured Declared Value In Car Insurance

Insured Declared Value or IDV is the monetary value of a product. Only the owner of that product can declare the IDV. The IDV of car insurance is the sum assured amount when you raise a claim during a policy period. It is the market value of your car or the price that you might receive for your car. Your insurance company will decide your claim amount based on the market value of your vehicle. Insured Declared Value changes every year.

All About Insured Declared Value In a Car Insurance

Here are the important things you should know about IDV in car insurance:

• Meaning

It is the approx. the market value of your car, it is the maximum amount you might get during a claim of your car insurance policy.

• Importance

When your car gets stolen or in case of any major damage, you will get the highest value of IDV.  The higher the market value of your car, the higher will be the IDV, and the higher will be the premium amount you will get for your car.

It helps in calculating the payment amount of premium while buying an insurance policy for your four-wheeler.

Also Read: Tips To Avail No Claim Bonus For A Car Insurance Policy  

• When Calculating IDV

When you are calculating an IDV, do not reduce it or do not overstate it. If you reduce the IDV, in case of any loss your claim amount will be reduced. And if you overstate the IDV, it will increase the premium but your insurance company will compensate based on the type of loss, not the whole IDV. Make sure that you do not provide your company an inaccurate or false IDV. This could lead to the rejection of your insurance claim.

• Factors Affecting IDV of your Car

The value of a car depends upon the type. IDV varies accordingly with your car type. Various car models of the same type can have different IDVs. It depends upon the manufacturer and the features in the model of the car. There can be a difference in the cost of a car depending on the location from where you buy, this also affects the IDV.  The value can also change depending on the age of your car and its working condition.

• How to Declare Correct IDV?

You need to do market research before buying an insurance policy, to declare the correct IDV of your car. Take a look at some details like prices of second-hand cars of the same model or prices of cars of the same manufacturing year. You can do this research online and then you can set a value equal to the prices of the second-hand models as the IDV of your car.

Take Away

In some cases of a policy claim,  the Insured Declared Value is not required for the calculation of the car insurance claim amount. It is important to declare IDV every year in case you buy a Comprehensive Car Insurance Policy. The IDV will depreciate with time.

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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.