IDV in motor insurance: How to pick a value that actually reflects your car

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IDV is the current market value of your vehicle as assessed and recognized by your insurer. It's the amount you'll  get in case the car is stolen or it is declared a total loss after a major accident. For relatively new cars, IDV is normally very near to the ex-showroom price less standard devaluation. For older cars, it reflects the insurer' s assessment of market rates, resale trends, and the availability of parts.

Avoid the temptation to lower IDV too much

Most buyers simply declare a lower IDV to decrease the premiums, but they end up losing out when it comes to making an actual claim. In the event of theft or total damage to the car, the insurance payoff will not be more than the sum insured that you had accepted for your car. For example, under-declaring a Rs 10-lakh car at Rs 7 lakh may save you a few hundred rupees a year but will cost you Rs 3 lakh in a total-loss claim. Always choose an IDV that reflects what you would realistically get if you sold the car today.

What happens if you push IDV too high

Some buyers have the tendency to inflate IDV to maximize future payouts, but normally insurers do not accept highly unrealistic values. If they do accept the higher IDV, your premium shoots up while the payout may still be disputed later if the declared value is way above reasonable market estimates. Higher IDV does not increase the amount of minor- accident claims, as those depend on the cost of repairs, rather than the vehicle's total value.

How to judge the correct market value

The most straightforward way is to check the live resale prices of your model on portals where cars are regularly bought and sold. Compare listings of the same variant, year, and mileage. Cross-check that with the depreciation chart used by Indian insurers: 20 percent in year one, 30 percent in year two, and up to 50 percent by year five. A realistic IDV generally rests in the middle of the resale price band, in line with the insurer's depreciation table and the actual state of your car.

What changes at renewal

As your car gets older, insurers will automatically offer a lower IDV. Do not accept the default without checking market prices. If your car is well-maintained or has lower mileage than average, you can negotiate a slightly higher IDV, supported by valuation data. If the car is older than five years, insurers may insist on a manual survey before approving the value. This is to ensure a fair payout benchmark is agreed upon by both parties.

Frequently Asked Questions

1. Does IDV affect all kinds of claims?

No. IDV matters only in cases of theft or total loss. In case of repair claims, insurers pay the

actual repair cost subject to policy terms, deductibles, and depreciation on parts.

2) Can I negotiate IDV with the insurer?

Yes, most insurers at renewal would allow a reasonable adjustment if you provide evidence

of market prices or a valuation report. Extremely high or low values are usually rejected.

3) Does fitting accessories increase IDV?

Factory-fitted accessories are already included in IDV. Aftermarket additions like alloy

wheels or infotainment systems can be added to IDV if you declare and pay a small extra

premium.