Insured Declared Value (IDV) In Car Insurance

IDV stands for Insured Declared Value. Simply put, it’s the current market value of your car, and the maximum amount your insurer will pay if your vehicle is stolen or damaged beyond repair.

The IDV is calculated based on your car’s make, model, variant, age, and condition. For new cars, it’s close to the ex-showroom price. As your car gets older, standard depreciation rates are applied each year, as per IRDAI (Insurance Regulatory and Development Authority of India) guidelines.
Here’s a quick example:

Let’s say you bought a car for ₹10 lakh, and it's now one year old. As per IRDAI rules, a 15% depreciation is applied for cars between 6 months and 1 year old. That means your IDV would now be ₹8.5 lakh.

So, in case of theft or total loss, ₹8.5 lakh would be the maximum claim you can receive under your policy, provided all terms and conditions are met.

That’s why the IDV matters. It directly affects both your premium and your claim amount, making it one of the most important things to get right when buying or renewing your car insurance.

The Insured Declared Value (IDV) plays a crucial role in how your car insurance policy works. Here’s why it matters:

• The maximum claim amount you can receive in case your car is stolen or damaged beyond repair is based on its IDV.

• IDV also helps decide your policy premium; a higher IDV means better coverage, which may slightly increase your premium.

• In case of minor accidents or part replacements, the repair costs are calculated separately based on actual expenses and applicable depreciation, not the IDV.

• For total loss or theft claims, your compensation is usually equal to the IDV, subject to the terms of your policy.

• Choosing the right IDV ensures you're not overpaying on premiums or underinsured during a major loss. It’s best to match it with your car’s current market value.

Calculating the Insured Declared Value (IDV) is simpler than it sounds. It’s based on your car’s ex-showroom price (excluding registration, insurance, and road tax) and adjusted for depreciation based on the vehicle’s age.

As per IRDAI guidelines, insurers follow a fixed depreciation schedule:

Using this, here’s how the IDV is calculated:

IDV = Ex-showroom Price – Depreciation

If you've added non-factory accessories, their value (after applying 50% depreciation) is added to the above amount:

IDV = (Ex-showroom Price – Depreciation) + (Cost of Accessories – 50% Depreciation)

Factory-fitted accessories are already included in the ex-showroom price.

Choosing the right IDV helps you strike the perfect balance between premium and claim coverage, especially in cases of theft or total loss.

The IDV full form is Insured Declared Value, which represents your vehicle's current market value. It is a key factor when calculating premiums for both comprehensive car insurance and third-party vehicle insurance. In accordance with IRDAI, your insurance IDV is calculated at standard depreciation rates relative to your car's age. For vehicles over 5 years old, the vehicle IDV will be determined by consensus between the insurer and the owner according to the document's condition and the market price. To estimate your premium, try an online vehicle insurance calculator before buying your car insurance.

Here is the list of the various elements on which a car’s IDV calculation is based:

• The car’s registration details.

• The location where the car was registered.

• The car’s showroom price.

• The car’s registration date and type.

• Make and model of the car.

• The car engine’s cubic capacity.

• The IDV is calculated by applying standard depreciation to your car’s ex-showroom price as per IRDAI guidelines.

• Choosing the right IDV helps balance your insurance premium and the claim amount you may receive in case of a major loss.

• If you’re unsure about the IDV offered, you can always discuss it with your insurance provider before finalising the policy.

• Make sure the premium quoted is in line with the IDV shown in your policy document to ensure transparency and accuracy.

Several key elements determine your car’s Insured Declared Value (IDV). Knowing how these factors influence your IDV can help you set the right value while buying or renewing your policy.

• Age of the Car: This is one of the most important factors. As your car ages, insurers apply a higher depreciation percentage (as per IRDAI rules). That means the older your car, the lower its IDV.

• Make and Model: Different car types (like hatchbacks, sedans, SUVs) come with different ex-showroom prices. Since IDV is calculated on the ex-showroom price minus depreciation, a more expensive model naturally has a higher IDV than a lower-priced one.

• Standard Depreciation (IRDAI Schedule): The IDV is not just a random number — it's guided by IRDAI’s standard depreciation chart. Depending on the car’s age, depreciation ranges from 5% to 50%, and this percentage is deducted from the ex-showroom price to arrive at the IDV.

• Non-factory Accessories: If you’ve installed any additional accessories after buying the car (like infotainment units, alloy wheels, etc.), their depreciated value (usually at 50%) is added separately to your car’s IDV. This can slightly increase your IDV depending on what’s installed.

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

Benefits of Lowering Your IDV

• A lower IDV means a lower premium, which can reduce your insurance cost significantly over time.

• This option is often considered for older vehicles, where the focus is on basic protection at an affordable price.

Things to Keep in Mind

• A lower IDV also means a lower sum insured. So, in case your car is stolen or completely damaged, the claim amount you receive will be less, even if your car’s actual market value was higher.

• In total loss situations, there’s a risk of underinsurance, where the payout may not fully cover your financial loss.

• Optional covers or add-ons like riders enhance protection, but they cannot make up for a lower IDV in total loss or theft cases.

So, while reducing IDV can help lower your premium, it’s important to strike a balance, one that keeps your insurance affordable but also ensures you’re not left underinsured when it matters most.

Your car’s Insured Declared Value (IDV) directly impacts how much you’re 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.

Advantages of Increasing Your Car’s IDV

• 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 completely destroyed in an accident or natural calamity.

• 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.

Disadvantages of Increasing Your Car’s IDV

• A high IDV results in a high car insurance premium. It will result in a costlier car insurance policy.
• If you never need to raise a claim for total loss for your insured car, you may never fully benefit from its high IDV.

• If your car is quite old and you’re not looking for maximum coverage.

• If you’re looking to keep your premium low and are willing to compromise on claim amount.

• If you don’t expect to use the car frequently or have a second vehicle.

Even then, it’s best to ensure the IDV reasonably matches your car’s resale/market value.

A higher Insured Declared Value (IDV) may be considered appropriate when:

• You want to ensure your vehicle’s sum insured reflects its current market value more accurately.

• You prefer broader financial protection in case of total loss or theft.

• You are comfortable paying a slightly higher premium in exchange for potentially better compensation in eligible claim scenarios.

Note: IDV should ideally represent the vehicle’s fair market value. It does not influence claims for partial damage repairs and should not be increased beyond the allowed range specified by the in

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.

• 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.

The IDV (Insured Declared Value) is applicable when you purchase a comprehensive or standalone own damage car insurance policy. It doesn’t apply to third-party-only policies, since those don’t cover damage to your own vehicle.

When you buy or renew your Tata AIG policy, the insurer suggests an IDV based on the age of your vehicle and depreciation, which you can adjust slightly within permissible limits. As your car ages, its IDV, and consequently, the coverage amount, gradually decreases.

With Tata AIG, you can enhance your coverage by choosing from more than 20 add-on covers such as Return to Invoice, Depreciation Reimbursement, and Engine Secure. Use our car insurance calculator to find the premium that fits your coverage and your budget.

The Insured Declared Value (IDV) is the maximum amount your insurer agrees to pay if your car is declared a total loss. It’s fixed at the beginning of your car insurance policy and is based on the car’s ex-showroom price, adjusted for depreciation as per IRDAI guidelines. Once set, it stays the same throughout the policy period, it doesn’t go up or down with the market.

Now, here’s when the IDV really matters:

• Total Loss: If your car is badly damaged in an accident, fire, flood, or any other covered peril, and the cost of repairs exceeds 75% of the IDV, it’s called a total loss. In this case, TATA AIG pays out the full IDV as compensation.

• Theft: If your car gets stolen and cannot be recovered, TATA AIG will compensate you with the full IDV amount.

• Constructive Total Loss (CTL): This is declared when the cost of retrieving and/or repairing the vehicle exceeds 75% of the IDV. In such cases too, TATA AIG pays you the full IDV without applying further depreciation during the policy period.

Additionally, TATA AIG offers a ‘Return to Invoice’ add-on cover. If you opt for this, and your car is declared a total loss or gets stolen, they won’t just pay you the IDV — they’ll cover the gap between the IDV and the original on-road price, including registration charges, road tax, and insurance cost. This helps you recover closer to what you actually paid for the vehicle.

So whether it’s theft, a flood, or an unfortunate crash, with TATA AIG’s Auto Secure - Private Car Package Policy, you’re backed by a comprehensive IDV payout structure designed to reduce your financial stress during such events.