In Bike Insurance, What Does IDV Mean?
When looking at bike insurance, Insured Declared Value (IDV) refers to the sum you would be entitled to from the insurer if your bike was beyond the scope of repair or recovery. A total loss occurs when a motorcycle is stolen or suffers such severe damage that it cannot be repaired. The bike’s current market value is included in the insured declared value. It is not the resale value; instead, it is an estimate. So, if you’re wondering, “What is IDV in two-wheeler insurance?”, you can think of it as the bike’s total amount insured.
Value Of The IDV
The purpose of IDV is to calculate the premium and determine the amount the insurance company will pay you if your insured vehicle sustains irreparable damage or is stolen, not to determine the resale value of the two-wheeler. Totalled or Total Loss is the formal term for it.
IDV As A Tool For Valuation
In the case of a comprehensive Bajaj Allianz bike insurance plan, IDV is relevant. The insurance regulator IRDAI sets the premium rates for third-party bike insurance. IDV can be used as a bike valuation tool for new and used bikes in a comprehensive insurance plan. #
Calculator For Two-Wheeler IDV Value
How Do You Calculate Your Bike’s IDV?
To know the sum assured amount that the insurer will pay you in the event of a total loss, you must be aware of the IDV of your motorcycle. IDV calculation for a two-wheeler is relatively easy. This depreciation is typically determined using a predefined schedule set by the insurance company. Additionally, any extra accessories or modifications added to the bike may be included in the IDV, subject to limits set by the insurer.*
Depreciation’s Function In IDV Calculation
Depreciation is another technical term that significantly influences the IDV and consequently, the payable premium as well. As a result, it is also essential in terms of claim settlement. For instance, you spend Rs. 50,000 on a bike. What will happen to the bike’s value in six months? The value of a vehicle is bound to lower as time passes, i.e., it will depreciate. This results from an asset being subject to wear and tear.
What transpires if the bike is older than five years? In these circumstances, the insurance provider and the policyholder agree on the value to be paid. Before insuring the bike, the insurance provider might arrange for a manager to inspect it and determine its worth.
How Is IDV For Two-Wheeler Insurance Calculated?
It is simple to determine IDV for a two-wheeler insurance policy. All you need to do is use a straightforward formula, gather the information to be included in the procedure, and calculate.
Insured Declared Value with Additional/Externally Fitted Accessories = (Price of the Bike – Appropriate Depreciation Value) + (Price of Externally Fitted Accessories for Vehicle – Their Depreciation Value).
Without accessories, the insured declared value equals the bike’s purchase price minus the appropriate depreciation value. Consider the manufacturer’s suggested retail price (ex-showroom listed price) as the bike’s price. Make sure you carry on the process for bike insurance renewal on time.
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* Standard T&C Apply
# Visit the official website of IRDAI for further details.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
