What Is IDV And Its Impact Of IDV On Your Car Insurance Policy

Car Insurance Policy

While most of us know that it is required by law to have car insurance, many of us need to be made aware of many other important facts. So, let’s establish some context for you before we get into one of these critical terms: IDV. We can purchase third-party liability or comprehensive insurance when purchasing a motor vehicle policy. The main distinction between the two is that comprehensive motor insurance covers your losses, whereas third-party insurance only covers damage you cause to the other party. Each policy has a different structure and payout in practice.

Describe IDV

IDV represents the maximum sum any Indian insurer like Bajaj Allianz car insurance online will pay out if the insured vehicle is stolen or completely destroyed. When you purchase insurance, they calculate it. It resembles what you would call the “sum insured” in health insurance.

Why Is It Crucial For Me To Understand IDV?

The premium rises in direct proportion to the IDV and vice versa. You can select the insurer that is most advantageous to you because different insurers evaluate it differently. Moral insurers always calculate the IDV of your car to be as close to its actual value as possible.

Does This Imply That My Claim Might Be Denied Based On IDV, Especially If I Purchase A Used Car?

No. Ideally, when you bought the car insurance, the insurance company had already agreed to pay you the amount equal to your IDV. Additionally, the insured vehicle’s condition is considered when the insurance company determines the IDV. There is a catch to this: The maximum IDV may only sometimes be appropriate because it may exceed the actual value of your car. Therefore, you should always pick an insurance provider whose IDV is close to the actual market value of your vehicle.

How Is IDV Determined?

It is determined using the vehicle’s listed selling price from the manufacturer. Then, it is changed by market conditions, the car’s age, use, and depreciation. For instance, if you spend Rs. 10 lakhs on a car, your sum insured, or IDV, may be Rs. 9 lakhs if an incident occurs within the next 6–12 months, depending on the insurer.

The Insured Declared Value (IDV) is a critical factor in your car insurance policy, as it represents the maximum amount you can claim in case of theft or total loss of your vehicle. Understanding how IDV is calculated and its impact on your policy is essential for making informed decisions about your car insurance coverage. A higher IDV typically means a higher premium but also provides better protection in case of unfortunate events. Conversely, a lower IDV can reduce your premium but may leave you underinsured. It’s crucial to strike the right balance to ensure adequate coverage while managing your insurance costs effectively.

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Claims are subject to terms and conditions set forth under a comprehensive car insurance policy.

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

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