Insured Declared Value (IDV)

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Insured Declared Value (IDV) It is the maximum sum insured fixed by the insurer which is provided on theft or total loss of the insured vehicle. Basically, IDV is the current market value of the vehicle. If the vehicle suffers total loss, IDV is the compensation that the insurer will provide to the policyholder. It is advisable to choose an Insured Declared Value that is neither very high nor very low but at par with the car's market value. Remember if you quote a lower IDV of your car, you will be required to pay a lower premium and ultimately, the claim amount will also be lower. The IDV is calculated based on a mutual agreement between the insurer and the policyholder. The value is based on vehicle assessment done by surveyors appointed by the insurer. You may increase or reduce your car IDV and end up paying more premium and vice-versa. Remember IDV would decrease each year at the time of renewal due to the depreciation factor which is taken into consideration by the insurance company for premium computation. IDV is calculated as follows: when you buy a new car, the IDV in insurance policy is equal to 95% of the car's ex-showroom price provided by the manufacturer. This is because normally the depreciation of a new car is 5%, so when we deduct this from the ex-show room price, we get the above value, i.e., 95%. Simply put mathematically: *IDV = Manufacturer's registered price – depreciation. OR *Insured Declared Value = (Company's listed price – Depreciation value) + (Cost of vehicle accessories - Depreciation value of the accessories). The calculation of the IDV depends on the following aspects: -Manufacturer, make, and model of the car. -Details of car registration, including the city of registration. -Date of registration of your car. -Whether it is a private car or one owned by a company. -Cubic capacity and ex-showroom price of the vehicle. The difference between declared value and insured value is simply how the insurance contract handles inflation during the insured period. Your Policy schedule will often show two values one referred to as the Declared Value and the other as the Sum Insured. The registration and the insurance cost are not included in the IDV. The cost of car accessories not fitted by the manufacturer is also calculated separately if insurance is required for accessories. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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