Here is all you need to know about IDV!

Car insurance is the shield which guards you against the unprecedented accidents of the road. It not only provides you with financial but legal assistance as well. There are a number of companies offering numerous online insurance policies in the market. Thus, you can simply avail them by making use of an internet connection and an electronic device (laptop, computer, tablet, smartphone, etc.) These policies help you drive safely and hassle-free.

We all search for a policy which will prove to be the best form of shied; however, the only problem with that is the premium that we have to pay- in exchange of the protection provided. There are a lot of factors which determine our insurance premium. The different factors are your age, location, your claim history, driving record, etc. But did you know that your IDV also plays a crucial role in determining your car insurance premium? If not, then this article will help you understand IDV and its importance in your insurance policy.

Firstly, let’s understand what IDV is:

The vehicle that we buy is the perfect reflection of our taste, demeanor, etc. Each and every individual is different and so is our choice of car. Some of us might be comfortable driving an SUV, whereas others might prefer a flashy sports car. However, the choice of your car is the factor which determines your IDV.

IDV stands for insured declared value’ and it is simply the current market value of your vehicle. It is the highest amount of money that the insurer will have to pay in accordance with your car insurance policy. Thus, in the case of an accident (when it is completely damaged or if it is stolen), your insurer will reimburse the money on the basis of the IDV that you have set. IDV is available on a comprehensive insurance cover and not on a third-party cover.

For example: If you have a vehicle and its market value is set at, say 10 lakh rupees, then the maximum compensable amount will be 10 lakh rupees ( in the case of an accident). This IDV is calculated on the basis of the manufacturers selling price- excluding the depreciation, insurance, and registration costs. It also includes the modifications and accessories that you have installed but is not included under the manufacturers selling price. Hence, this is the reason why your car insurance premium decreases with the increasing age of your car.However, it is important to remember that your car value will depreciate by 5 %, after the first 6 months of your vehicle purchase. The biggest reason why you should know your IDV is to make sure that you don’t receive an inadequate amount of reimbursement.

However,you can set your IDVat the time of your car insurance renewal.But remember that the limitations will vary from one insurance company to another.

Hope this helped you get an insight into the topic of IDV and will help you make a well-versed decision. Good luck and all the best!

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