What is IDV calculator in bike insurance?
IDV can seem like a complicated process and difficult to calculate. However, it is quite easy to understand. Let’s learn all about it.
Many insurance jargons can feel confusing at first, and IDV may be one of the terms that you do not understand. But do not worry, it is a simple concept that can be broken down and understood easily. IDV stands for Insurance Declared Value and is nothing but the market value of your bike. In comprehensive bike insurance, it is the amount that you would be compensated for if your bike is lost or stolen, or damaged to the point where it cannot be repaired ie. total damage. IDV depreciates over time with the market value of your bike.
What is IDV?
As mentioned, IDV is the depreciated market value of your bike. But what does this mean? Does this refer to the price at which you can personally sell the bike? No, it does not. ‘Market value’ of the bike here means the value according to the specifications of the manufacturer, or the amount that the manufacturer values your bike at. This is the IDV of your bike and will depreciate over the years accordingly.
How Does the Bike’s IDV Depreciate?
Let’s understand all about the depreciation of a bike’s IDV. It will depreciate by percentage over the years based on the age of the bike. This is due to the fact that regular wear and tear over time will depreciate the value of the bike and its parts, thus depreciating its IDV. The depreciation would be as follows:
|
Age of the Bike |
Percentage of Depreciation on IDV |
|
6 months or below |
5% |
|
6 months to 1 year |
15% |
|
1-2 years |
20% |
|
2-3 years |
30% |
|
3-4 years |
40% |
|
4-5 years |
50% |
|
5+ years |
IDV would be mutually determined by the insurance company and the policyholder |
How is IDV for a Bike Calculated?
The next thing to know is how a bike’s IDV is in fact calculated. This is a simple process. The ex-showroom price of the bike minus the depreciation value would result in the IDV. However, it is important to note that the registration cost, road tax, and insurance cost would not be included in the IDV calculation. Further, any accessories that are fitted later would have to have their value calculated separately. Since IDV reflects the bike’s market value, here are some of the factors which can impact the IDV of your bike:
- The bike’s make and model
- The policy period for your bike
- The registration date for your bike
- The type of your bike’s insurance policy
- The city in which you registered your bike
- The age of your bike
- The type of fuel that your bike consumes
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Takeaway
As you can see, IDV is not a complicated concept. It is simply the market value of your bike which would be compensated to you in case of loss, theft, or total damage of your bike when you avail of a comprehensive bike insurance policy.
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.
