Insured Declared Value (IDV) In Car Insurance

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Car Insurance in Ahmedabad

Ahmedabad is a thriving business hub with many entrepreneurs travelling in and out of the city on a daily basis. In addition to that, the traffic in Ahmedabad is very unorganised in certain parts of the city, increasing the number of accidents and small damages to cars.

To protect yourself and your car from unexpected damage and loss during the increasing traffic in the city, having valid car insurance in Ahmedabad is necessary.

Here is all you need to know about the role and benefits of a car insurance policy in Ahmedabad.

Why Do You Need a Car Insurance Policy in Ahmedabad

  • Road Accidents - The traffic in Ahmedabad is very unorganised in certain parts of the city, increasing the number of accidents and damages to cars. In the year 2020, Ahmedabad reported 978 road accidents.

  • Monsoon Season - The monsoon season in the city is quite severe and ends up causing considerable damage to roads every year, increasing the risk of accidents in the city. This seasonal damage, combined with increasing traffic, can pose a significant threat to your vehicle’s well-**being.

  • Poor Road Conditions - Poor roads also contribute to the poor performance of four-**wheelers and increase the requirement of timely maintenance for car owners. These deteriorating road conditions can be attributed to seasonal changes and reckless driving behaviours.

  • Theft - Theft is another problem in the city of Ahmedabad. There have been many rackets of vehicle theft in the last few years. Losing your car or parts of it can be an expensive affair if you do not have the correct four-**wheeler insurance for protection.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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What is an ideal IDV for car insurance?

What is an ideal IDV for car insurance?

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Ideally, your car’s IDV should be close to its market value. For a new car, it will be the invoice value of the car. As the car ages, you can account for depreciation in its IDV. The IDV should be enough to cover total loss or damage during a mishap.

What are IDV and NCB in car insurance?

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IDV is a car’s Insured Declared Value. It is the maximum amount an insurer will provide during claim settlement. It is the basis for a car insurance premium calculation.

NCB is a No Claim Bonus. It is a reward granted by the insurer to an insured for not filing a single claim during the policy term. It is provided as a discount on the insurance policy premium.

Is the IDV for private and commercial vehicles calculated differently?

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No, the calculation for the IDV for private and commercial vehicles is done in the same way. It depends on the market value of the vehicle and the applicable depreciation for all kinds of vehicles.

Why do different insurers declare different IDVs for the same car?

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Some insurers may lower a car’s IDV to lower the premium for the customer. However, it is not advisable because it will also reduce the sum assured for the insurance policy.

Does a new car’s IDV drop as soon as I take it out of the showroom?

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As soon as a car is taken out of the dealership showroom, depreciation is applicable to it. This depreciation is taken into account when calculating the car’s IDV. Therefore, the car’s IDV drops as soon as the car is taken out of the showroom.

Why does my car’s IDV decrease every year when I renew my car insurance policy?

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The market value of your car depreciates every year due to wear and tear and the car’s ageing. Depreciation is the primary deciding factor for the IDV calculation. Therefore, as the depreciation on your car increases, its IDV decreases.

Can I increase my car’s IDV?

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Yes, you can increase a car’s IDV to get a higher sum assured. However, it results in a higher policy premium.

How much can I increase or decrease my car’s IDV?

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Usually, car insurance providers allow car owners to increase or decrease their car’s IDV by about 15%. So, if your car’s IDV is ₹10 lakh, you can choose its IDV anywhere between ₹8.5 lakhs to ₹11.5 lakhs.

Can I get complete compensation with depreciation for my car?

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Yes, with Tata AIG, you can add a Return to Invoice add-on cover to your car insurance policy. This insurance rider covers the difference due to depreciation between your car’s purchase price and the compensated amount.

Moreover, if there is a new car of the same make and model available from the manufacturer, we provide you with the difference between the claim amount and the cost of the new model, including the cost of registration and road tax spent by you.

Can I increase my car’s IDV when I renew my car insurance next year?

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Some insurers may provide you with the option to increase your car’s IDV in the subsequent years at the time of car insurance renewal. However, it is not an advisable practice since the car’s market value decreases with every passing year. Therefore, you can avoid paying an unnecessarily high premium for a car whose market value is decreasing.

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