Benefits of IDV Value Calculation for Two-Wheeler Insurance

Buying insurance has become easy with time but without a thorough knowledge of how insurance works, you may miss out on the coverages that you should get. As you know, if your two-wheeler gets stolen or gets completely damaged due to an accident and if your two-wheeler is insured, your insurer is liable to provide compensation. This maximum compensation or sum assured set by your insurer under a policy is termed as IDV or Insured Declared Value. Since you spend a good amount of money on the premiums, you should find an insurer offering you the correct IDV. Thus, knowing how IDV is calculated, helps you in your decision making process when you are screening and choosing the plan which best suits your requirements.

How To Calculate IDV?

IDV is basically the market value of your two-wheeler. The market value is the manufacturing price minus the depreciation incurred by it. The manufacturing price is the selling price of your two-wheeler set by the manufacturer and does not include the registration fee. The depreciation value refers to the wear and tear that your two-wheeler goes through with time.

You can calculate the IDV of your two-wheeler with this easy formula:

IDV = Company listed selling price - depreciation charge

If you want to include the accessories that are not built-in by the manufacturer, the actual value and the depreciation value of the accessories are included while computing the IDV.

The above formula gets modified to:

IDV = (Company listed selling price - depreciation charge) + (Price of Two wheeler’s accessories not added in selling price - depreciation value of said accessories)

Depreciation Rate Applicable To Two Wheelers

Depreciation value is levied based on the age of the two-wheelers. Below goes a table containing the depreciation value applied for calculating the IDV.

What If The Two Wheeler Exceeds 5 Years?

The above table shows depreciation charges for two-wheelers not exceeding 5 years. When a two-wheeler exceeds the age limit of 5 years, the depreciation value depends on its serviceable condition along with the state of its body parts. If the components are made of different materials, the IDV is computed accordingly. The IDV can be decided based on mutual agreement between the insurer and policyholder in case of two-wheelers exceeding the 5-year mark. The insurer may engage a surveyor for verifying the state of the two-wheeler. However, the insurer will have to bear the expense of the surveyor. Basically, the higher the age of the two-wheeler, the higher the depreciation rate.

List of Factors Affect IDV

The IDV is computed keeping the actual price and depreciation in mind. However, there are some factors that can have a direct impact on IDV. Here are the influencing factors:

• Age of the two-wheeler
• Registration date
• City of registration
• Fuel type
• Make and model
• Insurance policy term

Conclusion

IDV influences the reimbursement amount generated for repair work or replacement cost of your two-wheeler. Furthermore, it is directly proportional to the policy premium. Make sure the IDV is calculated correctly so that you get the proper financial assistance for your two-wheeler.

Types of Bike Insurance You Should Know:

Third Party Two Wheeler Insurance

Comprehensive Two Wheeler Insurance Policy

You May Also Like To Read:

What is a Bike Insurance Renewal?

Two Wheeler Insurance Add-ons

Bike Insurance Details by Registration Number

Fine for Driving Two Wheeler Without Insurance

How to Get Duplicate Two Wheeler Insurance Copy Online

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.