When you opt for buying motor insurance, your insurer will assign an IDV or insured declared value for your vehicle. The IDV will be crucial in determining the insurance premium that you’d pay.
An online IDV calculator allows you to get a quick and accurate estimation of your vehicle’s IDV. The Insured Declared Value is basically the maximum sum assured that your insurer will provide in case of total loss or theft of your vehicle. You can declare a higher IDV as per your requirements. Here is a quick guide on increasing your vehicle’s IDV and the benefits that you can avail of from it.
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Increasing vehicle IDV while buying car insurance
While buying a car, the value of your car and its parts will drop with time and usage. A vehicle that is older than five years will have a market value that can reduce by almost 50% than the original price. Accordingly, your car insurance premium amount will reduce with the decrease in its insured declared value.
Some insurance providers offer the option to increase the IDV during policy renewal. You can choose to hike the IDV in car insurance or any other vehicle insurance which will but it will also increase your premium amount. Meaning, if you have a four-year-old car that had its value depreciated to Rs.5 lakh from its original price of Rs.8 lakh, you may increase its insured declared value back to Rs.8 lakh. However, you will have to pay higher premiums for that.
Here are some key factors to remember while increasing the IDV:
- There has to be a mutual agreement between you and your insurance provider about the increase in insured declared value.
- The increase in the IDV will be applicable only in the case of a total loss or theft.
- Make sure to avoid inaccurate IDV value declaration to your insurer as it might create issues during claim settlement. Use an IDV calculator to find out the appropriate IDV.
Benefits of Increasing Car Insurance IDV
Experts suggest keeping the insured declared value of your car either close to or more than its market value. A higher IDV is essential to safeguard the financial investment that you make on your vehicle. Here’s how it can benefit you:
Higher coverage in case of theft or complete damage
Sometimes severe road mishaps might lead to irreparable damage to your vehicle. The extent of damage can be such that you might have to opt for purchasing a new one. If the IDV of your car is higher, you can get significant coverage to finance the purchase of a new vehicle.
However, those with a low policy IDV might not get enough compensation that can be sufficient for a new vehicle. A low IDV might ensure lower premiums, but it won’t be able to provide enough coverage for such situations.
Similarly, a higher IDV can help you during cases of car theft. You can plan to buy a replacement vehicle with the claim amount you receive.
Peace of mind
Apart from providing a higher compensation, car insurance policies with an increased IDV can also help you to stay carefree. Even if your vehicle is stolen or suffers severe damage due to any reason, you can receive an extensive claim amount. This would enable you to manage business finance effectively.
Although increasing the IDV might lead to higher premiums, it will be instrumental in providing better financial coverage and security during unforeseen events.
To Conclude
If you are looking to buy a car insurance policy or planning to switch insurers, you can compare different insurers online and choose according to your requirements.
It is imperative to understand the concept of IDV and how it can have an effect on your decision to purchase vehicle insurance. The reason being it will help you to make an informed decision. Furthermore, online devices like IDV calculators can further assist in your decision-making process.
