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Is Car Insured Declared Value (IDV) and Car Valuation the Same

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What is an IDV?

If simply put, IDV is the acronym for Insured Declared Value. In layman terms, it is the current market value of your car, from insurance’s point of reference. It refers to the highest value of money that would be payable by the insurer company per the terms of your vehicle’s insurance policy.

There might be cases where your vehicle may be subject to a total loss or a total constructive loss. It might so happen that it gets stolen, or even gets damaged to a point that it cannot be repaired. In all such cases, the vehicle IDV would be the maximum amount that you can claim from the insurance company.

How to Determine Vehicle IDV

To determine vehicle IDV, proper calculations are to be done. To do the same, the insurance companies usually operate on certain easily available parameters and then adjust those with the standard available depreciation rates, set by the Indian Motor Tariff. The factors are listed below:

  • First purchase or registration date of the vehicle available on the registration certificate
  • City where the vehicle was registered, also available on the registration certificate
  • Current registration type- company owned or individual owner
  • Ex- showroom price i.e. the actual price of the car with addition to the state tax
  • Manufacturer, make and model of the vehicle
  • Cubic capacity, which is based on the model details
  • Vehicle description, which is also based on the model details

It is an important thing to note that as your vehicle ages, the premium that you give decreases. It is because of the fact that the IDV is directly proportional to the payable Insurance Premium.

How car valuation is different from car IDV?

While car IDV determines the value of your car, it does so strictly for insurance purposes. On the other hand, car valuation is the market value of your car, which you can get if you wish to sell it. It differs from the IDV as the considerations for both are different. Car valuation also depends upon the demand and supply of your car.

For example, the IDV of your vintage car might be extremely low, but its car valuation will be very high since it is rare. Also, the car valuation depends upon the condition of your car and its engine, whereas the IDV would only go by the age of the car and not its conditions.

Therefore, IDV though similar in nature, is starkly different from car valuation.

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