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What is IDV in Bike Insurance & How to Calculate Bike Depreciation Rate?
Simplifying insurance jargons to make your experience with insurance easier. That’s what we’re here for. One of the most common and often misunderstood jargons is IDV – what IDV means in bike insurance and its importance for your bike’s coverage.
Let’s help you understand all you need to know about an IDV in two-wheeler insurance.
When it’s time to renew the bike insurance of your bike, most people just pay the insurance premium and are done with it. However, you need to know the total worth of the vehicle and the amount you will get back if the two-wheeler gets stolen or worse, destroyed up to no repair.
Well, that’s what IDV stands for, i.e., Insured Declared Value. Remember that IDV is valid only under ‘Comprehensive Bike Insurance Policy’.
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What is IDV in Bike Insurance?
What is IDV in Bike Insurance?
- Insured Declared Value or IDV is the current value of your bike in the market, after calculating the depreciation on it. It determines the maximum payout you'll receive in case of theft or total damage to your bike due to an accident.
- For Example, say you buy a brand-new bike for ₹1 lakh (excluding the cost of registration, road tax, insurance, accessories, etc.). Your IDV at the time of purchase will be ₹1 lakh since your bike is brand new. But as your bike gets older, its value starts to depreciate, and so does the IDV.
- So, say your bike is worth ₹65,000 after two years. Your IDV will also be ₹65,000, depending on different factors.
- Now, remember that IDV calculates the depreciation of your vehicle according to the ‘manufacturer’s specifications’ or ‘the amount the manufacturer values your bike at’ and NOT the value you can personally sell the bike.
- This means that if someone offers to buy your bike for ₹85,000, the IDV will still stand at ₹65,000.
- So, think of it as your bike's insured value. A higher IDV means a bigger payout but also a higher premium.
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What is the Importance of IDV in Bike Insurance?

What is the Importance of IDV in Bike Insurance?
- It's the Right Value of Your Bike: In a bike insurance, your bike’s IDV determines the right value of your bike as it factors in various things such as the make and model of the bike, how long it's being used for, its cubic capacity, the city where its being used at, etc. Therefore, it’s important to state the correct IDV. Insurers will cover you based on that, for what it deserves.
- Your Bike Insurance Premium Depends on This: Your premium is based on various factors such as your policy type, the city you ride in, the cc of your bike, the make and model of your bike, your claims history, and most importantly, your IDV.
- Your Claim Amount Depends on This: Your IDV is also basically the highest amount you can receive in case of damage and losses. Some people tend to incorrectly state their IDV, hoping to reduce their premium. However, this only tends to be a disadvantage as in the event of a claim, too, you will receive a lesser amount, and that amount may not be sufficient for your bike.
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What is IDV Calculator for Bike?

What is IDV Calculator for Bike?
- The calculation of your bike's IDV is simple, it's the ex-showroom price/current market value of the two-wheeler minus the two-wheeler depreciation rate on its parts.
- The registration cost, road tax, and insurance cost are not included in the IDV.
- IDV is calculated while purchasing the policy or during policy renewal and then adjusted with depreciation on the two-wheeler.
- Also, if there are accessories that have been fitted later, the IDV of those parts will be calculated separately.
How to Calculate Your Bike's IDV?

How to Calculate Your Bike's IDV?
Calculation of IDV in bike insurance is a simple process, which you can do using bike insurance calculator. If you have extra accessories that are not factory-fitted, then IDV is separately calculated by your insurer at an extra cost. Here’s the formula to calculate IDV in bike insurance -
- Calculating IDV for Bike Without Accessories: IDV = Price (ex-showroom) of the bike – Depreciation Value
- Calculating IDV for Bike with Additional/Externally Fitted Accessories: IDV = Price (ex-showroom) of the bike – Depreciation Value + (Price of accessories - depreciation value of accessories)
How To Calculate IDV for Two-Wheelers Over 5 Years Old?

How To Calculate IDV for Two-Wheelers Over 5 Years Old?
- The IDV is calculated based on your bike’s manufacturer’s selling price and the depreciation calculated over the years.
- Until up to 5 years, the depreciation of the same goes from 5% for a relatively new bike to up to 50% for a bike of 4 to 5 years old.
- However, in case your bike is more than 5 years old, the IDV of the same is calculated by your insurer.
- In this case, your insurer will essentially decide the same as per the condition of your two-wheeler and its parts.
What are the Factors Involved in IDV Calculation for Bikes?

What are the Factors Involved in IDV Calculation for Bikes?
Since your IDV reflects the market value of your bike, the following are some of the factors considered to calculate the IDV:
- The make & model of your bike
- Registration date of your bike
- The city you registered your bike in
- The type of fuel your bike consumes
- The age of your bike
- The type of your bike policy
- Your bike policy period
What is the Role of Depreciation in IDV Calculation?
What is the Role of Depreciation in IDV Calculation?
- Depreciation plays a significant role in calculating the IDV (Insured Declared Value) of your two-wheeler insurance.
- The higher the depreciation on two-wheeler, the lower its IDV. This means you will receive a lower payout from the insurer in case of theft or total damage. This depreciation is calculated based on the two-wheeler depreciation rate.
- This is because since IDV is the current market value of your bike at the time of insurance purchase or renewal, and as the bike gets older the depreciation value of bike increases and it loses its market value over time.
Depreciation Rates for Your Bike
How Does IDV and Premium Affect Your Insurance Claim?

How Does IDV and Premium Affect Your Insurance Claim?
- It is imperative to have the right IDV for your two-wheeler. Some insurance providers offer you low-premium products at the cost of lowering your IDV.
- So, in case of theft or total loss when you need to claim your insurance, you will get much lesser value for your car, simply because you had a lower IDV.
- Your IDV is directly proportional to your premium. Lower the premium, lower the IDV, and vice versa! Thankfully, at Digit, we let you set your IDV, so you know exactly what to expect.
Why Should You Care So Much about Your IDV?

Why Should You Care So Much about Your IDV?
FAQs about IDV in Bike Insurance
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