What is IDV in car insurance?

IDV in car insurance means the current market value of your car after deducting depreciation based on its age. In simple terms, think of IDV as your car’s current market price after depreciation. As you use your car, it depreciates. When it does, its market value falls. This is the whole concept of IDV.

In car insurance, IDV means much more. It represents the maximum coverage of your comprehensive car insurance policy. It is paid if your car suffers a total loss or is stolen and cannot be recovered.

The IDV of your car insurance policy decreases by a certain percentage every year. If you are wondering why, it is because of depreciation. As your car ages, it depreciates in value, and the same thing is reflected in its IDV.

How to Calculate IDV for Car Insurance?

The IDV of your car insurance policy is calculated based on the car's full market value. This includes any additional accessories that were not factory-built but added by you, depending on your tastes and preferences.

Hence, the calculation of IDV is done in the following two ways -

3.1. With Accessories

If you have fitted additional (not factory-fitted) accessories to the car, the IDV calculation formula will be as follows –

IDV = (Manufacturer's listed price - depreciation) + (Cost of accessories - depreciation of accessories)

3.2. Without Accessories

If you do not add any accessories, the IDV formula shortens to –

IDV = (Manufacturer's listed price - depreciation)

Standard Car Depreciation Rate for IDV Calculation

Now that you know the formula for IDV calculation, the next step is to know the depreciation rates so that you can use the formula.

The depreciation rates for IDV calculation are standard and fixed by the Motor Tariff Act. They are as follows -

If your car is more than 5 years old, the IDV will be decided mutually between you and the insurance company.

How to Check IDV with Generali Central's IDV Calculator?

Now you know how to calculate the IDV of your car. But why do the calculations yourself when you can have an online calculator for easier calculations?

Generali Central offers a simple IDV Calculator that helps you calculate your IDV in minutes. Just enter your vehicle’s details, click on ‘Calculate’, and check the IDV instantly.

Generali Central’s IDV calculator is free, saves you from manual calculations and any errors thereof, and offers instant results.

Factors that Help to Determine the IDV of a Car?

While you can calculate the IDV of your car instantly, it is important to know the factors that affect it. So, here are the main factors that determine the IDV of your car –

 • Age:
The age of your car directly impacts its IDV. Older cars depreciate faster. This means they have lower IDVs and lower premiums, too.

 • Depreciation:
The rate of depreciation is used to calculate the IDV, and it depends on your car’s age. Older cars mean higher depreciation, lower IDVs, and lower premiums.

 • Accessories:
Adding accessories to your car that are not factory-fitted enhances its value. Moreover, the cost of accessories, after depreciation, is used for IDV calculation. So, if you add accessories, the IDV would go up, and so would your premium.

 • Make, model and variant (MMV):
The IDV of the car depends on its market value. The market value, in turn, depends on the car’s make, model, and variant. SUVs are more expensive than sedans. As such, they have higher IDVs and higher premiums. Moreover, the fuel variant of your car also affects its price. Petrol cars are cheaper than diesel ones, while EVs are expensive. Thus, IDVs also depend on the fuel type.

 • Registration location:
You must have seen different ex-showroom prices of the car in different cities. Delhi’s ex-showroom price would be different from Ahmedabad’s. As such, the market value would also change and depend on where the car is registered. If the market value differs, the IDV would also vary in different cities. Cars registered in metropolitan cities may have higher IDVs compared to those in non-metropolitan cities.

How Does Insured Declared Value Impact Car Insurance Premium?

The IDV is closely related to premium calculations. A higher IDV gives you better coverage but also involves a higher premium. On the other hand, if you choose a lower IDV, your premiums would also be low, and so would the coverage.

Important things to keep in mind while calculating the IDV for the car

When you are calculating the IDV of the car, here are some factors to consider –

 • You have the flexibility of choosing an IDV that is different from the calculator’s value.

 • There are specific maximum and minimum IDV limits.

 • The IDV decreases every year as your car ages.

 • Choose an IDV that is closer to the car’s actual market value after depreciation.

 • Enter the correct details of your car to know the right IDV.

Advantages and Disadvantages of Decreasing or Increasing IDV

Choosing an optimal IDV for your car insurance policy is vital. Increasing or decreasing the IDV has its respective pros and cons. Have a look -

IDV and Claims

The IDV of your car insurance policy is directly related to claim settlements. Here’s how –

 • The claim amount is limited by the IDV. In other words, the maximum claim that you get from your car insurance policy is limited to its IDV.

 • In the case of theft or total loss, you get the IDV (minus any adjustments for scrap value) as a claim.

Since IDV is important in claim settlement, it is important to choose it correctly.

IDV and Car Insurance Renewal

When renewing your car insurance, it's important to reassess the IDV. This would ensure that your policy remains relevant and provides adequate coverage. Moreover, a recalculated IDV will result in an adjustment to your premium amount, too.

A lower IDV means a lower premium, while a higher IDV might increase the premium. Therefore, it's essential to ensure that the recalculated IDV of your car insurance accurately reflects your car’s current value. This ensures you have adequate coverage in case of a total loss or theft, without being over-insured or under-insured.

Additionally, during renewals, the insurer will also consider the condition of your car. Any repairs or modifications done in the last year can affect the IDV. Using an IDV calculator for a car can help you compare the IDV offered by various insurers, ensuring you get the best coverage and premium rate.