Should I accept a lower IDV to save premium?

It lowers the payout on a total loss or theft, which is the claim you cannot absorb yourself. The premium saving is small and the exposure is the whole vehicle.

Why is my IDV so much lower than what I paid?

Depreciation is scheduled and steep: forty percent by year four, fifty by year five. It reflects market value rather than what you spent.

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Motor Insurance IDV Calculator

Insured declared value from age and price. The IDV is the ceiling on a total loss claim and the base for the own damage premium, so lowering it to save premium lowers the payout on the claim that matters most.

Also called: insured declared value calculator, car idv.

Insured declared value

₹8,40,000

₹8,40,000 after 30% depreciation on a 3 year old vehicle. That is the maximum a total loss claim can pay, and the own damage premium of ₹25,725 is charged on it. The IDV caps a total loss or theft payout and sets the own damage premium. Lowering it saves little and exposes a lot.

Depreciation applied

30%

Value lost to depreciation

₹3,60,000

Own damage premium

₹25,725

IDV including accessories

₹8,57,500

IDV next year

₹7,20,000

On choosing an IDV

The IDV caps a total loss or theft payout and sets the own damage premium. Lowering it saves little and exposes a lot.

On the estimate

This is an estimate from a rate table, not a quote. Underwriting sees your history and prices accordingly.

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

IDV is the ex-showroom price less depreciation on a standard schedule: five percent in the first six months, fifteen percent to a year, then twenty, thirty, forty and fifty percent through year five. Beyond five years it is negotiated. The IDV serves two purposes at once, which is where the tension lies: it caps what a total loss or theft claim pays, and it is the base for the own damage premium. Accepting a lower IDV reduces the premium and reduces the payout on exactly the claim you cannot absorb yourself.

depreciation follows a schedule by vehicle age, and the IDV caps the total loss payout

P: Ex-showroom price
d: Depreciation by age

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a three year old car

Ex-showroom price when new: ₹12,00,000
Vehicle age: 3
Accessories fitted: ₹25,000
Own damage premium rate: 3%

Insured declared value₹8,40,000

12L less 30%; the schedule gives 40% at year four

Open this example

a brand new vehicle depreciates 5 percent

Ex-showroom price when new: ₹12,00,000
Vehicle age: 0
Accessories fitted: ₹25,000
Own damage premium rate: 3%

Insured declared value₹11,40,000

boundary: the first band of the schedule

Open this example

Method and limits

What it assumes

The standard depreciation schedule used by Indian motor insurers.

What it deliberately does not model

Vehicles over five years old have a negotiated IDV rather than a scheduled one.
Depreciation on parts at claim time is a separate deduction unless zero depreciation cover applies.
Insurers offer a range around the standard IDV.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Should I accept a lower IDV to save premium?: It lowers the payout on a total loss or theft, which is the claim you cannot absorb yourself. The premium saving is small and the exposure is the whole vehicle.
Why is my IDV so much lower than what I paid?: Depreciation is scheduled and steep: forty percent by year four, fifty by year five. It reflects market value rather than what you spent.