How is IDV calculated?

What is IDV in bike insurance?

IDV, short for "Insured Declared Value," refers to the highest claim amount which your insurance will cover if your bike is stolen or seriously irreparably damaged. IDV in bike insurance aids in your decision-making when buying a two-wheeler insurance plan.

IDV is also taken into account to represent the insured vehicle's current market value. In other words, the entire amount you will be entitled to recover as reimbursement for the irreparable harm done to your bike is the vehicle's Insured Declared Value.

IDV in Two-Wheeler Insurance: How to Calculate

When calculating IDV in bike insurance, depreciation is taken into account as well as the market worth of your two-wheeler at the time the policy first begins, which changes over time. It is advisable to obtain an insurance plan for your two-wheeler as soon as you buy it to take advantage of high IDV because IDV is not determined by the cost you will pay for your bike insurance plan.

Factors Affecting the Calculation of IDV

Since the IDV indicates the market worth of your bike, the following factors are taken into account when calculating the IDV:

• Bike's brand and model

• Date of registration of your bike

• City where you registered your bike

• Policy of your bike

• Period of your bike policy

Importance of IDV in Bike Insurance

1. Your IDV is essentially the maximum amount you are eligible to obtain in the event of damage and loss, therefore it influences the amount of the claim as well. To lower their premium, some customers tend to provide their IDV incorrectly. Although, this only seems to be a negative because you will only receive a smaller amount in the event of a claim, and that amount might not be adequate for your bike.

2. IDV in bike insurance establishes the exact values of your bike by taking into account a number of parameters, including the brand and bike model, how long it has been in use, its cubic volume, the location where it is being riden, etc. As a result, it's crucial to give the right IDV. Based on that, insurers will provide coverage for you at the amount it merits.

How is IDV Calculated?

The IDV value for bikes will assist you in understanding the entire premium due for the insurance policy you have selected. But how can you figure out the bike's IDV?

The IDV value of a two-wheeler will be determined by factoring in the two-wheeler's current market selling price. The IDV is derived by deducting the depreciation on the two-wheeler's parts from the bike's market value. To calculate a bike's IDV, use the formula below.:

IDV = Vehicle’s market price – Cost of depreciation + Bike Accessories Cost- Depreciated value of the parts

Your IDV can be calculated quite easily by subtracting the depreciation on the vehicle's parts from the vehicle's ex-showroom price or current market value; the IDV does not cover the cost of registration, road tax, or insurance. Additionally, the IDV of any accessories that were added subsequently will be determined separately.

Conclusion

One of the most crucial aspects of the IDV in bike insurance; is that it not only sets the true value of your bike but also the price you will pay as a bike premium. If the bike is stolen and never found, or worse, it becomes irrecoverable after an accident! In all circumstances, the insurance provider will reimburse you for the full amount stated on your insurance policy's IDV!

This article does not necessarily reflect the opinions of the editors or management of EconoTimes