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  4. Why you should take your bike’s IDV seriously when buying insurance

Why you should take your bike’s IDV seriously when buying insurance

IDV or Insured Declared Value is calculated on the ex-showroom price of your two-wheeler. IDV is fixed on the basis of the manufacturer's selling price, which includes invoice value & GST, and excludes the registration and insurance charges.

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It’s important to remember that the right policy can be chosen when you choose the right IDV for your bike.

While purchasing an insurance policy, it becomes a daunting task for an individual to understand the several technical terms mentioned in the documents. Among such terms, insured declared value or IDV is one such vital term that you will come across while purchasing or renewing your two-wheeler insurance policy. Therefore, it is crucial that one knows what it means, how it can impact bike insurance, and what the appropriate IDV of a vehicle should be, so that one can go ahead and purchase the best bike insurance  policy. *

What is IDV or Insured Declared Value?
 
IDV or Insured Declared Value is calculated on the ex-showroom price of your two-wheeler. IDV is fixed on the basis of the manufacturer's selling price, which includes invoice value & GST, and excludes the registration and insurance charges. *
 
IDV of your two-wheeler depends on the following factors:
 
• Make of the vehicle
• Model of your vehicle
• Sub-model of your bike
• Registration date
 
A more formal definition of IDV is "The sum insured for the purpose of the two-wheeler insurance policy which is fixed at the commencement of each policy period for the insured vehicle". *
 
As IDV is based on the manufacturer's current listed selling price, it is subject to depreciation or a drop in value. Vehicle depreciation value is based on the following percentage table:
 
* Standard T&C Apply
 

Age of the Vehicle

% of depreciation

Not exceeding 6 months

5%

Exceeding 6 months but not exceeding 1 year

5%

Exceeding 1 year but not exceeding 2 years

15%

Exceeding 2 years but not exceeding 3 years

20%

Exceeding 3 years but not exceeding 4 years

40%

Exceeding 4 years but not exceeding 5 years

50%

In the case of obsolete and older vehicles (over 5 years), the IDV will be the value agreed between the insurer and the insured. * Kindly visit official IRDAI website to confirm the details.

How is bike insurance premium dependent on IDV?

The premium that you will be paying for your bike insurance renewal  has a lot to do with the IDV; both of them go hand-in-hand. The insurance premium is directly proportional to the IDV. Higher IDV means a higher premium and vice versa. Therefore, as your bike ages, the premium decreases. *

* Standard T&C Apply

IDV and policy suitability

It’s important to remember that the right policy can be chosen when you choose the right IDV for your bike. The IDV is the maximum amount one can claim in case of loss or damage to the vehicle. For example, if your bike gets stolen just after 5 months of its purchase, you don’t have to worry as your insurance company will pay you on the basis of your IDV. IDV for new vehicles is 95% of their ex-showroom price. If you choose a lower IDV, the premium will be lower, and so will the compensation amount based on your claim. A higher IDV means higher premiums and may let you benefit from a higher compensation amount. You would surely want the best and the maximum amount as reimbursement. Ideally, the insured declared value should be close to the market value of your bike, so that in the event of any mishap or theft, you are compensated for it accordingly. *

We hope that the above information on IDV helps you take an informed decision to buy the right insurance policy for your bike/two-wheeler. Bajaj Allianz General Insurance Company offers affordable policy options for two-wheelers and four-wheelers. You can take advantage of such products and protect your vehicle from financial damage. *

* Standard T&C Apply 

You can get more information on the features and benefits of a two-wheeler insurance policy just visit Bajaj Allianz General Insurance Company: 

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.