IDV in Bike Insurance

In simple words, IDV is the maximum amount an insurer is ready to reimburse if your insured two-wheeler is destroyed beyond repair or stolen. A motor insurance company calculates the current value of your vehicle as soon as you obtain comprehensive bike insurance.

So, if you have always been curious about what bike IDV means, it indicates a much higher coverage limit is offered for your insured bike. If you wish to enhance your policy’s coverage, you can opt for the Return-to-Invoice add-on, which guarantees full compensation of your bike’s original value if it gets destroyed in an accident or is stolen.

The IDV of a two-wheeler is determined by calculating its approximate current market price. For the current market selling price, you need to account for depreciation. The formula to find IDV is:

IDV (Insured Declared Value) = (Market value of the vehicle – depreciation) + (Value of additional accessories – their respective depreciation)

Besides applying the basic formula for IDV in two-wheeler insurance, insurance companies also consider the bike model you own, location and other factors.

Before you buy bike insurance, you can also ask for revised IDV quotes if you feel the calculated sum does not adequately justify your vehicle’s actual market value. For this, kindly use our online bike IDV calculator or get in touch with us. Our team will ensure prompt assistance.

Below is a hypothetical scenario to help you understand how an IDV calculator for a bike works:

Suppose you paid an ex-showroom price of ₹2,29,000 while purchasing your motorcycle. Now, let us assume that your bike is more than 4 years old and less than 5 years old. As per the standardised rates, this four-year-old vehicle has lost around 50% of its original market value.

Therefore, if you try to find out its IDV, it will come around:

IDV = ₹2,29,000 - 50% of ₹2,29,000 = 1,14,500 (half of the initial price)

As per the insurance company, now your bike is valued at ₹1,14,500. Thus, if your bike suffers a total loss due to an accident or is stolen, you can claim this amount. Understanding IDV is essential to review multiple policies and eventually choose the one that suits your budget and needs.

Due to regular wear and tear, your bike's value falls over time. That is why every online IDV calculator for bikes operates according to a standard depreciation chart. Here you can refer to the IDV depreciation table:

If you desire a greater IDV or coverage, your insurance company will charge a higher premium.

For instance, suppose, unfortunately, your bike is stolen within one year of purchase. A high IDV can protect you from a bigger financial loss and you will be able to replace your two-wheeler easily.

As the bike gets old, its parts wear out, its resale value drops, and consequently, its IDV reduces. A lower IDV means a lower risk, resulting in lower premiums. This can be cost-effective for the owner of an old vehicle. On the contrary, for newer bikes, the depreciation is minimal, so the IDV remains closer to the purchase price. This results in a higher premium but also ensures better coverage.

Hence, best plans are not always the ones that have maximum IDV in bike insurance. It is important to strike a balance between cost and coverage. Choosing the right IDV value of a bike that closely reflects your bike’s current market value ensures that you don’t overpay in premiums and get fair compensation when you need to file a claim.

Feel free to use our online IDV calculator to understand how different coverages impact your plan premiums. This tool will particularly help you as your two-wheeler continues to age and its value decreases over time.

As you raise a claim for total loss or theft, your bike insurance company examines the situation first. Next, they offer you compensation based on the IDV marked in your two-wheeler insurance plan.

If you opted for a low IDV value when purchasing or renewing your policy, your payout will also be lower, regardless of your vehicle’s current market value. At such a time, you may face a significant financial burden if you need to replace the bike out of pocket.

Therefore, choosing the ideal IDV is very important. It directly determines how much you will receive from your insurer if your bike suffers total damage or is stolen. Hence, ensuring you get comprehensive bike insurance with IDV close to your vehicle’s current market value is crucial.

When finalising your bike insurance IDV, do not just accept a number your insurance company offers. When you plan to buy two-wheeler insurance, consider using an IDV calculator for quick comparisons.

Deciding whether you should opt for bike insurance with a high IDV depends on a few factors, such as how long you plan to use your bike, how frequently you ride, and your current location.

To choose the ideal IDV, follow these strategies:

Figure Out Your Bike’s Market Value

You can check your bike’s resale value online or visit a few local dealers for estimates. An online IDV calculator for bikes also does the same thing by factoring in your bike’s age, brand, model and your location.

Balance Between Your Needs and Budget

It is not always a better idea to select a plan with a higher IDV, thinking that it will secure you a higher claim amount. This is because it will contribute to more premiums. Likewise, if you choose a low IDV than your two-wheeler’s current value, it may not provide adequate coverage.

Seek for IDV Personalisation Based on Age, Condition and Usage

If you maintain your bike well and it offers decent mileage despite being old, you can opt for a plan with relatively more IDV. Bikers who do not ride frequently and usually travel short distances can maintain the value of their bikes for a while.

Adjust IDV During Policy Renewal

Many people miss the opportunity to adjust the IDV in bike insurance while renewing their policy. You must avoid this oversight, as it can lead to a costly premium, and your insurer will offer a lesser amount in the case of a total loss. If you own a bike which is in good condition, with little use, or with new accessories, consider negotiating the IDV with your insurer.

Here are some factors showing how choosing the right IDV for your bike can be beneficial in the long run:

Ensures Precise Premium Calculation

As mentioned earlier, IDV is the market value of your two-wheeler. Thus, the IDV you select will directly impact your insurance premium. You should not settle for a low IDV as it will significantly reduce the coverage following an accident or theft. Similarly, a higher IDV will result in unnecessarily high premiums.

Calculates Appropriate Claim Amount

When you raise a claim in case the bike is stolen or suffers total loss, your insurance company will make a reimbursement depending on the IDV. Therefore, the best IDV for bike insurance will be the one providing sufficient compensation for any damages to your bike as you file a claim.

Ensures Transparency

When you opt for a reliable insurer like TATA AIG, you get accurate IDV calculations with transparent policy terms. Hence, it gives you peace of mind as you precisely understand your bike’s valuation and secure a justified coverage.

Our online IDV calculator works based on multiple factors. Before you buy bike insurance, you can use this tool to accurately find out the right IDV. For proper calculation, provide these details:

Type of Two-Wheeler

This factor plays the most important role in determining the IDV estimation. Therefore, you must specify your vehicle type to get the right price.

Location/ State

Here, you should mention the region/ state where your vehicle was originally registered.

Manufacturing Year

In this field, enter the correct year of purchase of your bike. This is another important factor behind finalising the IDV in bike insurance. With every passing year, your bike's value will fall. Thus, the year of purchase helps determine a reasonable range for the IDV.

Make and Model

After entering the right details for the above-mentioned criteria, you will be asked to pick from the make and model options. So, specify the manufacturer's name and enter the correct model.

Variant

Finally, you can choose the correct motorcycle variant. Every variant has different engine features. A higher price and IDV are associated with a bike that has a more powerful engine. Therefore, if you enter this detail correctly, it will eventually play a role towards determining an accurate estimation for your vehicle.