IDV in Car Insurance

IDV, also known as insured declared value, is the current market value of the insured vehicle. It is the amount your insurer will pay if your vehicle is stolen or damaged beyond repair. Basically, it is the maximum compensation you can receive in case of a total loss.

When you buy a car insurance policy, you need to pick the right IDV. It plays a major role in how much you will get during a claim. A higher IDV gives you better coverage but also increases your premium, while a lower IDV reduces the premium but can leave you underinsured.

Deciding on an IDV value for car insurance provides stability and reassurance to the car owner against unexpected events such as theft and damage. Here are some of the benefits of IDV value in car insurance.

Accurate Premium Calculation

If you are wondering is IDV important in car insurance, it definitely is. A car insurance IDV helps in calculating a car insurance premium. When selecting car insurance, choosing a higher IDV results in a higher premium. A lower IDV results in a lower car insurance premium. Therefore, it is crucial to choose the adequate IDV.

Fair Claim Payout

A well-chosen IDV ensures you receive the right compensation if your car is stolen or damaged beyond repair. Since the IDV is the maximum amount the insurer will pay in a total loss case, setting it correctly helps you avoid getting a reduced claim when you need it the most.

Reflect Car Actual Value

Another benefit of choosing the right IDV in car insurance is knowing the car's actual value. Since IDV is based on the vehicle’s age, make, and depreciation, it gives you a clear picture of what your car is actually worth at the time you buy insurance. This also makes it easier to compare policies and pick coverage that truly matches your car’s value.

Prevents Underinsurance

Selecting the right IDV also protects you from being underinsured. If you choose a value that is too low to reduce the premium, you may end up receiving a much smaller amount during a total loss claim. A proper IDV keeps your coverage aligned with your car's actual value.

While calculating the insured declared value of a car, there are key components, which vehicle owners need to keep in mind. These components are:

Manufacture Listed Selling Price

These are the manufacturer's quoted prices for the vehicle. This price is also known as the ex-showroom price; it does not include registration and taxation.

Depreciation

As a vehicle ages, its value declines due to a process known as depreciation. Insurance providers generally use the vehicle's age to determine the IDV.

Accessories

Accessories are the aftermarket components that vehicle owners add to their cars. The approved and declared aftermarket accessories can be included in the IDV, increasing the claim payout if they are stolen or damaged.

Calculating the IDV value in car insurance is easy if you know the IDV calculation formula. Here is the formula for calculating the IDV.

IDV = (Ex-Showroom Price - Depreciation) + Value of Declared Accessories

Let us understand this by example. Suppose Mohit has a car with an ex-showroom price of ₹8 lakh. The car is 2 years old, so let’s assume depreciation is ₹2 lakh.

He has also added accessories worth ₹20,000 that are not included in the original price.

In that case, Mohit’s IDV would be:

IDV = (₹8,00,000 – ₹2,00,000) + ₹20,000

IDV = ₹6,20,000

The IRDAI generally sets depreciation rates based on vehicle age, which we will learn about later in this guide.

TATA AIG offers car insurance plans that come with insured declared value. You can set the IDV at the time of buying policy, and this amount represents your car’s current market value. An insured declared value is calculated using the manufacturer’s listed price and the age of the vehicle, so the coverage you choose stays aligned with what your car is actually worth.

If you have added any extra accessories, you can declare their value as well, so they are included in the overall IDV. If your car is more than five years old or discontinued, then you can agree on a value with a TATA AIG representative so you still get the right protection.

Once the IDV is finalised, that amount remains the maximum payout in case of a total loss or theft during the policy period. This helps make claim settlements smooth and transparent when you need support the most.

Depreciation Rates for Parts

The IDV in car insurance is an essential component. It is the current market value of your car and is used to determine the maximum amount you can receive in the event of a total loss or theft.

When you buy or renew a policy, TATA AIG calculates the IDV based on the car’s ex-showroom price and its age-wise depreciation. As your car gets older, depreciation increases, so the IDV also decreases each year.

Let us understand the IDV cover in car insurance by example. Sumit has purchased car insurance for Maruti Suzuki.
The ex-showroom price of his car is ₹7 lakh.

The car is one year old, and the depreciation rate is around 20%. He also added the accessories worth ₹20,000 to the car.

Based on that, the IDV value of the car will be ₹5,75,000. This price becomes the maximum amount Sumit can receive if the car is stolen or completely damaged.

The IDV of a car also affects add-ons such as zero depreciation, return-to-invoice, and more. Let us understand this in detail.

Zero Depreciation

Zero depreciation is an essential add-on that eliminates depreciation's impact on car insurance own-damage claims. It helps in receiving the maximum claim amount without depreciation deductions. For example, Mohit has purchased car insurance with a zero depreciation add-on.

When he files a claim after an accident, TATA AIG will not deduct the cost of depreciated parts, such as plastic, fibre, or metal. The final payout he receives will be higher than a standard policy because the claim is settled without applying depreciation.

Also Read: Zero Depreciation in Car Insurance

Return to Invoice

The return-to-invoice add-on gives you the full on-road price of a brand-new car if your vehicle is stolen or completely damaged.

Instead of receiving only the IDV amount, this add-on pays the difference so that you can replace your car without a big loss. The on-road price includes registration, road tax, and insurance.

Also Read: Return to Invoice Cover

Electronic Fittings

This is another add-on that protects your electric vehicle components and accessories that are not part of the original manufacturer’s price. The maximum amount you can receive under this cover will be limited to the IDV listed in your policy.

Electric Surge Secure

This add-on protects your electric car and its charging equipment from damage or destruction caused by short circuits, arcing, overheating, electrical leakage, or water entering the system. The maximum amount you can receive under this cover is the IDV specified in your policy.

The IDV value in car insurance depends on various factors, such as the car's make and model, age, and more. Let us understand in detail these factors:

Age of Car

One factor that affects the IDV in car insurance is the car's age. The IDV depends on the vehicle’s market value. If the vehicle is older, the IDV will be lower; if newer, higher.

Make and Model

Another factor that influences the IDV in car insurance is the car's make and model. Different vehicles have different market values, so the IDV varies based on whether the car is a basic hatchback, a premium sedan or a high-end SUV. Luxury or high-end vehicles generally have higher IDV.

Vehicle Accessories

The accessories you add to your car also affect the IDV. If you install extra electrical or non-electrical accessories that are not part of the original model, their value gets added separately. This increases the overall IDV because the car’s total value increases.

Also Read: All About Electrical/Non-electrical Accessories in Car Insurance

Geographical Location

Where you live also plays a role in deciding the IDV. Cars registered in metro cities or areas with higher traffic and risk usually have a slightly different market value than those in smaller towns. This variation in market pricing can influence the final IDV set for your car.

Reducing your car’s Insured Declared Value (IDV) can lower your insurance premium, which can seem like a smart way to save money, especially for older cars. But it is important to understand both the upsides and trade-offs before making that choice.

• A lower IDV means a lower premium, which can significantly reduce your insurance costs over time.
• This option is often considered for older vehicles, where the focus is on basic protection at an affordable price.

Your car’s Insured Declared Value (IDV) directly impacts how much you are compensated in case of a total loss or theft. While increasing the IDV may seem like a great way to boost your insurance coverage, it’s important to understand the actual impact.

• You get a higher claim amount in case your car is stolen or declared a total loss.
• It provides better protection if your car is destroyed in an accident or a natural disaster.
• Opting for a ‘Return to Invoice’ (RTI) add-on from TATA AIG can even help cover the gap between the IDV and the original on-road price, including registration and taxes, giving you better financial recovery.

Calculating the IDV cover in car insurance is easy using the calculator. It is an online tool commonly used by vehicle owners to determine a car's current market value.

With this tool, car owners will also receive an estimate of their car insurance premiums. Here is how the insured declared value calculator for car insurance works.

Step 1: Open the IDV Calculator Page

Visit the official IDV calculator page on the TATA AIG website. The tool will help you check your car’s IDV using a few basic details.

Step 2: Enter Vehicle Details

After opening the calculator page, add the car details such as vehicle make and model, car variant, age and more.

Step 3: Account for Accessories

If your car has accessories, add the cost of any accessories not included in the car's original listed price.

Step 4: Automatic Calculation

The tool will calculate the insured declared value of the car based on the car's age and depreciation rate as per the IRDAI.

Step 5: View IDV and Premium

After the calculation, the tool will determine the IDV and, based on that, provide the car insurance premium.

IDV directly impacts the car insurance claims. The Insured Declared Value (IDV) is critical in certain claim scenarios under the own damage cover of your car insurance policy:

Total Loss

If your car is damaged beyond repair and the cost of repairs exceeds 75% of the IDV, it is treated as a total loss. In such cases, TATA AIG pays the full IDV amount as compensation.

Also Read: Total Loss in Car Insurance

Constructive Total Loss (CTL)

If the cost of retrieving and/or repairing your vehicle exceeds 75% of the IDV, it is considered a constructive total loss. TATA AIG will settle the claim by paying the full IDV, as per policy terms.

Theft

If your vehicle is stolen and declared non-traceable by the police, TATA AIG compensates you with the IDV amount, subject to claim admissibility.

Vehicle owners can process reimbursements and cashless claims with TATA AIG. Here is a step-by-step procedure for a car insurance claim.

Cashless Claim Procedure

• Step 1: Inform TATA AIG about the damage as soon as possible through the self-service portal or by calling the helpline at 02264898282.
• Step 2: After notifying, find the network garage using the network garage locator.
• Step 3: Take the vehicle to the nearest garage and submit the policy and other documents to the garage owner.
• Step 4: Once done, we will assign the surveyor to inspect the vehicle and assess the damage.
• Step 5: Upon completion of repairs, we will settle the repair bills directly with the network garage.

Reimbursement Claim Procedure

• Step 1: Inform us about the incident by calling the helpline number (02264898282) or using the self-service portal.
• Step 2: Upon notification, take your vehicle to any authorised garage of your choice.
• Step 3: After the repair, pay the repair amount and collect all original documentation, such as invoices and receipts.
• Step 4: Initiate a reimbursement claim by completing the claim form and submitting it, along with other documents.
• Step 5: Our representative will review the claim form and other documents. Upon approval, we will send the claim amount directly to your bank account.

Buying a car insurance with adequate IDV with TATA AIG is a straightforward process. Here is the process of buying a car insurance policy.

• Step 1: Visit the official TATA AIG website and click on the “Personal” section. Select the “Car Insurance” under the motor insurance section.
• Step 2: Click the “Insure your Brand New Car” option. Fill in the details, such as the variant and brand name. Click on the “Continue” button.
• Step 3: Various car insurance plans will appear. Choose the plan and select the insured declared value.
• Step 4: After that, complete the CKYC process and pay the car insurance premium.
• Step 5: Upon successful payment, the car insurance policy with adequate IDV will be sent to the registered email address.

If you want to optimise the IDV value for car insurance, here are some tips to consider.

• As the vehicle ages, its IDV value starts decreasing. Given this, it is best to review the IDV based on the car's value periodically.
• When buying car insurance, it is best to compare plans based on IDV, as different insurance providers use different calculations to determine it.
• When buying a car insurance plan, it is important to opt for a zero-depreciation add-on, as it minimises the impact of depreciation on the claim payout.
• While selecting the IDV for the car, also consider the car's future depreciation.
• Another important tip for vehicle owners is to use the IDV calculator.

Choosing the right IDV in a car insurance policy is essential for vehicle owners. It helps ensure the maximum claim payout in the event of a total loss or damage beyond repair. The IDV value in car insurance depends on factors such as the car's age, make, and model.

When you buy car insurance online, it is crucial to select the right sum insured value. TATA AIG offers a car insurance plan that lets you customise your insured declared value to match your car’s actual worth and coverage needs.

Apart from this, our car insurance plan also comes with unique add-ons, such as zero depreciation, roadside assistance, consumables cover, and more, for owners who need enhanced coverage.

With an easy buying and renewing process, you can purchase a plan in just a couple of minutes. Also, you can check the car insurance status online to know the car insurance validity date in advance.

With our wide network of cashless garages, policyholders can repair their vehicles without paying any cash. Secure your car with our budget-friendly car insurance plan now.