InvestorQ : I wanted to calculate the IDV of my vehicle for raising a claim. Are there any points I must bear in mind when doing the same?
Suhani Mirza made post

I wanted to calculate the IDV of my vehicle for raising a claim. Are there any points I must bear in mind when doing the same?

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Manisha Mehta answered.
3 years ago
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IDV or Insured Declared Value is one the most important aspect of a vehicle insurance from a policyholder’s point of view. This is because the IDV, or the insured declared value, is the amount that you will get if your vehicle gets stolen or suffers total loss in case of an accident.

A few aspects you must be aware of when raising a claim for your vehicle:

- The IDV of your car varies based on its age according to the following table which is in accordance with the rules of sector regulator IRDA:

Vehicle's age

Percentage depreciation (for IDV calculation)

Less than 6 months

5%

More than 6 months but not exceeding 1 year

15%

More than 1 year but not exceeding 2 years

20%

More than 2 years but not exceeding 3 years

30%

More than 3 years but not exceeding 4 years

40%

More than 4 years but not exceeding 5 years

50%

More than 5 years

The IDV is calculated based on a mutual agreement between the insurer and the policyholder.

- As the vehicle’s owner, it is your responsibility to be aware of its IDV. Otherwise, you might stand to lose as you may not receive adequate compensation at the time of a claim.

- Do not understate the IDV of your vehicle when purchasing a car insurance. This is because if you quote a value that is lower than the actual market value of the vehicle, you might benefit from paying a lower premium for insuring it, but at the same time, you will also receive low coverage.

- Similarly, overstating the IDV, too, is not recommended. This is because you might think that you will receive a higher sum insured by quoting a greater IDV. In reality, though, at the time of receiving a claim pay-out, the amount your insurance company provides you will depend on the type of loss and circumstances as much as its IDV.

Avoid overstating or understating your IDV at all costs. If your insurance company finds out that you may have lied in any information you provided it, the validity of your claim gets jeopardised.
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