We know there are terms in insurance that are difficult to understand but are extremely important to be acquainted with, one such term is IDV. The full form of IDV in insurance is ‘Insured Declared Value.’
IDV in car insurance refers to the current market value of your car. In other words, it is the amount your car would receive in today’s market.
This IDV in car insurance helps your insurer, a.k.a us determine your claim amounts correctly during claim payments. Additionally, it also helps us determine the right premium price for your car insurance.
Let’s understand with the help of an example, Say you buy a new car for ₹10 lakhs, so your IDV at the time of purchase will be ₹10 lakhs since your car is new.
However, as your car gets older, its value starts depreciating, resulting in a lower IDV. So, let’s say that after two years, your car’s worth is ₹6 lakhs; its IDV will also be ₹6 lakhs as per IDV calculator which considers various factors.
Also, remember that if you manage to sell your car for ₹7 lakhs, your car’s IDV will still be ₹6 lakhs. This means that IDV value is the amount at which your car is valued and not the value at which you can sell the car.