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Understand Depreciation Value & IDV of Your Two Wheeler

  • Author :
  • TATA AIG Team
  • Published on :
  • 26/05/2022

Anything that we use for an extended time is sure to have some wear and tear. These may not be things that we notice, but it does impact the overall value of the thing in question. This is especially true if the thing in question is something we want to put on the market.

For example, when we wish to sell a certain commodity, we cannot sell it at the price we bought it. This is because we need to consider that its value has fallen due to previous use. While this information may not be useful for most things, it is especially useful when we have to sell something or buy insurance for it.

For our article, we will be focusing on vehicles. Two-wheelers, to be particular. We will try to get a better idea about the depreciation rates for bikes in India and how that influences the rate of bike insurance. We will also try to get a closer look at how we can calculate the IDV of bikes and how a bike depreciation calculator can help us, among other things. All of this gives us a greater idea of how to understand the market bike valuation when we want to buy insurance for our bike or if we want to sell it.

Bike insurance as we know it has become synonymous with driving a bike. Today, if we are seen on the road with our vehicle sans insurance for our bike, the repercussions are serious. The government of India has made bike laws stricter in the new amendment to the Motor Vehicle Act, and if we are caught without insurance for our bike, we will have to pay a fine of ₹2000 or have our license confiscated. Also, if we plan to sell our bike, we cannot do so if we do not have a proper bike insurance policy.

If you want to buy insurance or need to renew your two-wheeler insurance, let Tata AIG be your carrier of choice. We offer you bike insurance renewal online in a few easy steps that can be completed in a few minutes. With us, you get a network of over 3300 cashless garages, a choice of own damage cover, comprehensive, third-party bike insurance, and Tata's trust.

What is Depreciation on a Motorcycle?

Bikes are not immune to the rule that most machines lose value over time. When it comes to two-wheelers, depreciation begins as soon as the vehicle is purchased. Not only does the total worth of a bike deteriorate, but so do various individual components.

As a result, India's IRDAI or Insurance Regulatory and Development Authority has established depreciation criteria that all insurers must follow. The rate of depreciation on a bike helps the insurer calculate the present value of your bike and put a price on it. The depreciation on a motorcycle also helps them determine the IDV or Insured Declared Value of your bike.

What is the Insured Declared Value of a Bike?

The Insured Declared Value, or the IDV, is the present bike valuation in the market. It includes the cost of depreciation on a bike and aids in calculating your bike insurance premium.

The IDV, or insured value of your bike, is an important part of your bike insurance since it decides the remuneration you can collect in the case of "total loss" of your bike, which includes complete damage or theft.

We recommend selecting an appropriate IDV for your coverage since a low IDV would result in inadequate insurance for your bike, while a greater IDV would result in higher premiums. The IDV, as well as the premium, decreases as your bike ages. So, calculate the IDV of your bike before making a decision.

How is the Insured Declared Value of a Bike Calculated?

One thing to keep in mind is that IDV is not based on the price you paid for the bike. Instead, it is determined using the bike's market value at the time the insurance is purchased. This number fluctuates a lot over time. To achieve the highest IDV, you need to get your bike insured within 6 months after your purchase. The IDV and insurance costs will be lower if your bike is older.

Depreciation Rates for Bikes in India

The bike depreciation rate is set by The Indian Motor Tariff. You can see the depreciation value of a bike per year in the table below.

Period Of Time the Bike has been Used % of Depreciation that IDV Depends on
Under 6 months 5%
Between 6 months and a year 15%
Between 1 and 2 years 20%
Between 2 and 3 years 30%
Between 3 and 4 years 40%
Between 4 and 5 years 50%
Over 5 years IDV decided by Insurance Company and Individual

Factors Affecting IDV of a Bike

When we look at the depreciation value of a bike year, there are various factors affecting the IDV of bikes.

  • The kind of motorcycle you have has an impact on the IDV. A regular commuter bike's IDV is often lesser than a sports bike. Moreover, if the bike you're riding has high-end amenities, the IDV will be substantially greater.
  • The IDV of your bike is also influenced by where it was purchased. The bike's ex-showroom pricing varies from one place to another.
  • As previously stated, depreciation on a bike is a significant factor in establishing the insured declared value of your motorcycle. As a result, the IDVs for 2 separate bike models manufactured in different years will differ.
  • The addons fitted in the bike are also considered when determining the IDV of your motorcycle.
  • The type of fuel your bike consumes also influences its IDV.
  • Finally, the type of bike insurance plan and its duration are important factors determining the covered IDV.


The IDV is one of the most essential factors in determining your bike insurance rate. It's critical to keep your IDV consistent when evaluating bike insurance rates from several insurers because this will help you get the best plan for your bike. To ensure that you receive the right IDV amount, go to your insurance agency's website and check the IDV of your bike using their IDV calculator. You can also calculate your bike depreciation rate on the bike depreciation calculator.

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