Bharti AXA TWO WHEELER Insurance Everything about Insured Declared Value in Two Wheeler Insurance 24 Apr 2018 Everything You Need to Know About the Insured Declared Value of Your Two-Wheeler According to the Motor Vehicles Act, 1988, getting two wheeler insurance when you purchase a bike is mandatory. It is for your own financial and personal safety as well as for any third party who gets in the crossfire. But the exact sum assured that will be covered by the company in the motor insurance is known as IDV or Insured Declared Value of your vehicle. You already know that your bike is subject to wear and tear over the period of usage – an occurrence which, in technical terms, is called depreciation of an asset. Because of this, the market value of two-wheeler vehicles also decreases over time. IDV determines the current market value of your vehicle and is the maximum amount that an insurance company will pay in case of damage, theft, loss or accident. Here are certain points to help you better understand the concept of IDV: How important is IDV? Without a determined IDV right at the beginning when you buy two wheeler insurance, there will be no benchmark to measure what exactly your vehicle is worth when it needs to be compensated after an event of loss or damage. It also comes to your help if you need to resell your bike or exchange it for a new one from the manufacturers. When do you get compensated on IDV? Since IDV is the total current value of your vehicle, it is only in a case of accidental damage to the bike or theft or loss, that you will get the amount from the two wheeler insurance company and not otherwise. How is IDV calculated? The IDV of your vehicle is determined by the two wheeler insurance companies on the current selling price listed by the manufacturing company on the model, minus the depreciation rate of the respective number of years adjusted accordingly. The IDV of accessory parts added afterwards is calculated separately, but the rate of depreciation is still applicable in the same manner. IDV = (Manufacturer’s listed MRP – depreciation %) + (Added parts not included in the MRP – depreciation %); this is the general formula in which your IDV is determined. What is the rate for IDV depreciation? IDV of the two-wheeler insurance goes down every year keeping in terms with the depreciation rate as per the table given by IRDAI. Applying the percentages on the current selling price as listed by the two-wheeler manufacturer, the insurance company determines the sum assured of your vehicle every year on two wheeler insurance renewal. Below is the table of depreciation rates as given by IRDAI. Below 6 months old 5% Six months to one year 15% One year to two years 20% Two years to three years 30% Three years to four years 40% Four years to five years 50% The premium based on IDV after 5 years Once a vehicle crosses 5 years of its lifetime, the value can be mutually settled between the insured owner of the vehicle and the two wheeler insurance company, based on the condition in which the bike and its parts are. Sometimes to agree upon a value, surveyor expertise can be taken to determine the market value of the vehicle. It is wise to agree upon the right IDV with your insurer or quote the accurate one when you buy two wheeler insurance online because even though a lower IDV means a lower premium at the beginning, the coverage will be less in the time of need. Explore Our Products Car Two Wheeler Travel Health Bharti AXA Advantages We've raised the bar in being your Two wheeler's ideal insurance companion 4.2 MILLION POLICIES ISSUED 79 BRANCHES ACROSS INDIA 4500+ CASHLESS GARAGE 24/7 CLAIM ASISTANCE Get Quote Request Call Back Category * - Select -CarTwo WheelerHealthTravelPersonal Accident Buy Renew Claim submit Disclaimer : The information published on this website is for the public's reference only. Content of this information is to provide an overview of your Travel needs and should not be relied upon for personal, medical, legal or financial decisions and you should consult an appropriate professional for specific advice. Bharti AXA General Insurance Company Limited makes no representations about the suitability, reliability, timeliness, and accuracy of the information, travel, services, or any other items mentioned on this subject for any purpose whatsoever.