How Can IDV Help Commercial Vehicle Owners?
Commercial vehicle owners should also consider using an IDV calculator for commercial vehicles to estimate the insured value. This is particularly beneficial for businesses that operate fleet vehicles, trucks, buses, and vans.
The IDV calculator simplifies the policy selection process, further helping in informed decision-making. Using the IDV calculator for commercial vehicle can be helpful while buying or renewing the policy. It offers a clear idea of the premium and coverage.
Is IDV the Same As Resale Value?
The IDV of your vehicle won't be the same as the market resale value, which can be surprising for many car owners. This is mostly because of the difference in consideration for each value.
The insurance valuation (in case of IDV) will follow the depreciation-based methods and is not influenced by market conditions. Therefore, when you buy or renew car insurance online, you'd notice that the vehicle resale value is lower or higher, subject to policy terms and conditions.
Should You Use an IDV Calculator During Policy Purchase?
Car owners should consider using an IDV calculator during policy purchase. As the process is simplified, car owners can make better decisions. It helps you choose a suitable balance for premium cost and coverage.
Here's how using an IDV calculator for car can be beneficial:
1. Get a clear understanding of the coverage levels.
2. Informed decision-making during the renewal process.
3. Improved understanding of what's required in the insurance.
How to Select the Right IDV?
Selecting the right IDV for your car can be slightly difficult. Selecting a lower IDV means paying less premium. However, there are risks to it too. These include:
1. Less claim settlement amount.
2. Lower coverage.
3. In case of total loss, you'd have to pay from your pocket.
Now, selecting a higher IDV means better coverage, but this has risks associated with it, too. These include.
1. A higher IDV generally means paying a higher premium.
2. The premium and coverage should be balanced to avoid overpaying.
This becomes more confusing if you're a commercial vehicle owner. After all, you'll have to factor in the profits and the losses. To avoid this, it is better to use an IDV calculator for commercial vehicle. Vehicle owners should aim for a realistic insured value and not choose the highest or the lowest value available.
To know how to choose the right IDV in case of a car, read more at How to Calculate IDV of a Car? Step-by-Step Guide?
What if the car resale value is higher than its IDV?
If your car's resale value is higher than IDV, you'd receive the claim settlement, in case of theft or total loss, based on IDV, not resale value. Depending on the circumstances, you may need to bear certain expenses yourself.
In case of higher IDV, will you get a higher claim settlement?
Claim settlement of the vehicle is subject to policy terms and conditions. The car insurance provider has specific assessment criteria based on which they will provide the settlement with regard to the vehicle's IDV.
Using an IDV calculator helps to estimate the insured value of the car. Therefore, you can choose a coverage that aligns with your insurance as well as your current needs. After all, choosing too high or too low an IDV wouldn't add much value.
Expert Note
This information is based on standard motor insurance guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) and commonly followed industry practices. Policy coverage and conditions may vary by insurer.
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