IDV: Insured Declared Value

Your Insured’s Declared Value is the sum insured on your car’s own-damage cover. It is the most you can be paid if the car is stolen or written off. It is fixed afresh at each renewal. The base is the manufacturer’s listed selling price for that make and model. From that, a depreciation percentage is cut, set by the age of the car. Cut the IDV to save premium and you cut the payout on the one claim that hurts. You also make a write-off more likely. Almost nobody explains why.

How is IDV calculated in India?

The filed motor policy wording sets it out plainly. IDV is the maker’s listed selling price for the brand and model. Depreciation is then applied on the schedule below. Accessories fitted to the car are added at their own depreciated value.

Age of the vehicle	Depreciation for fixing IDV	Applies to	Source
Not exceeding 6 months	5%	Private car package policy	IRDAI-filed wording, UIN IRDAN134RP0003V01201819
Over 6 months to 1 year	15%	Same	Same
Over 1 year to 2 years	20%	Same	Same
Over 2 years to 3 years	30%	Same	Same
Over 3 years to 4 years	40%	Same	Same
Over 4 years to 5 years	50%	Same	Same
Beyond 5 years, or a discontinued model	By agreement	Insurer and insured settle it between them	Same

Two details matter. The depreciation runs on the listed selling price, not on what you paid. Registration, road tax and insurance cost are not in the base. And once the IDV is set for a policy year, it holds. The wording treats it as the market value for the whole period. No further depreciation is applied at claim time. Run your own numbers on the IDV calculator.

Why does IDV drop so sharply in year one?

Because the schedule says so. It is 5% at six months and 15% at twelve. A car thirteen months old carries 20%. So the steepest fall lands between your first and second renewal. That is a rule, not a valuation. It is also why the gap between IDV and what you paid opens fastest early.

What does IDV actually pay out?

Only on a total loss, a constructive total loss, or theft. For everything else it does nothing. On a total loss the policy caps the insurer’s liability at the IDV, “less the value of the wreck”. On a partial claim the insurer pays the real repair cost. Parts depreciation is applied there separately.

That wreck deduction is the line most people miss. Say your IDV is ₹6,00,000 and the salvage is valued at ₹90,000. The cheque is ₹5,10,000, not ₹6,00,000. You get the full IDV only if you hand the wreck over. Ask the surveyor what the salvage was valued at. Ask whether you may keep the car or must surrender it. The answer changes the money.

Why does a low IDV make a write-off more likely?

This ought to be on every quote page. It is on none of them. The wording says a car is a constructive total loss when the cost of retrieval and repair tops 75% of the IDV.

That threshold moves with the IDV. Lower the IDV and you lower the bar the repair bill must clear. A ₹4,00,000 repair against a ₹6,00,000 IDV is 67%. The car gets repaired. The same repair against a ₹5,00,000 IDV is 80%. Now the car is written off. You are paid the smaller sum insured, less the wreck. Shaving the IDV to save a little premium can cost you the car.

The pressure runs the other way too. Some insurers quote a low IDV by default. It makes the premium look sharper than a rival’s. The own-damage premium is charged as a percentage of the IDV. So a 10% lower IDV is roughly a 10% lower own-damage premium. That is a small saving. It is set against a much larger cut in the worst-case payout.

Can you set your own IDV?

Within a band, yes. Most insurers allow some movement either side of their computed figure. The size of that band is set by each insurer. It is not in the filed wording. Beyond five years the value is explicitly a matter of agreement. Use that. If your model has held its value, argue the IDV up. If you have fitted accessories, get them listed in the schedule.

What you cannot do is inflate the IDV as an investment. On a total loss the insurer pays the IDV. But the surveyor still assesses the loss. A wildly overstated value invites a dispute at the worst moment. The honest ceiling is what a similar car of the same age actually sells for.

The add-ons that change the answer

Two add-ons in the filed wording rewrite the IDV rule. “Insurance at Manufacturer’s Selling Price” tops the sum insured up to the invoice price. It is available while the car is under 60 months old. “Return to Invoice” sets the IDV at the on-road price. That means selling price plus road tax and registration charges. On such a claim the insurer pays the lowest of three figures: the original on-road price, the IDV, or the current on-road replacement price for the same model.

Return to Invoice matters most on a young car bought with a loan. It closes the gap between the depreciated IDV and the loan outstanding. After five years it stops being worth the premium. The same logic runs through our comparison of third-party and comprehensive cover.

Does IDV affect your no claim bonus?

No. They are separate discounts on the same own-damage premium. Under the filed wording the bonus is 20% after one claim-free year. It rises to 50% after five. It cuts the premium, not the sum insured. A high IDV with a full bonus is entirely normal. Check where you sit with the no claim bonus calculator before you renew.

Frequently asked questions

Should I choose a high or low IDV?

High, in almost every case. The own-damage premium moves roughly in line with the IDV. So the saving from a low IDV is small. The cost is a smaller theft and write-off payout. You also drop the 75% threshold, which makes a write-off more likely. The only case for a low IDV is an old car you would happily walk away from.

What is the IDV of a car older than 5 years?

Whatever you and the insurer agree. The filed schedule stops at five years. Past that, the wording says the value rests on an understanding between insurer and insured. The same applies to discontinued models. That is your one real negotiation. Bring listings for comparable cars.

Will I get the full IDV if my car is stolen?

You get the IDV in the schedule, less the value of the wreck where there is one. In a theft that is never recovered there is no wreck. So the payout is the IDV. The claim must still be admitted and the papers must be in order. Handing over both keys is where theft claims usually stall.

Does IDV change my repair claim?

Not directly. Partial claims settle on the actual repair cost, less depreciation on the parts replaced. The IDV only sets the ceiling and the write-off threshold. So a high IDV does not get you a bigger dent claim. A zero-depreciation add-on does.

Is IDV the same for two-wheelers?

The schedule works the same way, on the maker’s listed selling price. Two-wheeler values are small in absolute terms. So the gap between a high and a low IDV is a few hundred rupees of premium. Take the higher one. Our page on two-wheeler insurance covers the rest.

Sources

IRDAI-filed Motor Private Car Package Policy wording, UIN IRDAN134RP0003V01201819 — IDV definition, depreciation schedule, constructive total loss threshold, no claim bonus table and add-on wordings. irdai.gov.in. Read 7 September 2026.