IDV Calculator


In India, motor insurance is a mandatory requirement for all types of vehicles, including cars and two-wheelers. Motor insurance acts as a reliable financial asset that provides security in case of unfortunate events, such as an accident.

The popularity of this particular insurance is evident from the fact that in 2018 the motor insurance market accounted for approximately 39.4% of the non-insurance premium.

But even though the penetration of motor insurance is increasing, people are still substantially unaware of the technical terms used in the policy documents, which further limits the reach of auto insurance. One such jargon, which often appears complicated but is extremely simple to understand is the IDV (Insured Declared Value).

What is IDV?




  • IDV or Insured Declared Value is the maximum sum assured determined by the insurance provider  which is reimbursed in case of any loss or theft of the vehicle.
  • The sum assured is calculated based on the current market value of the vehicle. The existing market value is derived by subtracting the depreciation of the vehicle (based on the time-lapse since purchase) from the selling price as listed by the manufacturer.
  • However the cost of registration and insurance premiums is not included while estimating the IDV amount. Moreover the value of external vehicle fittings (not form-fitted by the company) is evaluated separately.

How to calculate IDV for Car & Two-wheeler?


  • Here a simple formula. IDV = Manufacturer listed price of the proposed vehicle  Depreciation on the proposed vehicle.
  • As stated while estimating the listed price of the proposed vehicle it is important to exclude the registration or insurance cost paid.
  • On the other hand" depreciation for the vehicle is calculated according to a specific schedule. According to the IDV calculation the market value of the proposed vehicle reduces with its age every year. As per this logic the IDV of a new car (purchased recently) will be higher than that of an old car.

How to calculate depreciation schedule?


Age of Vehicle Depreciation Percentage Adjusted For Determining the Insured Declared Value (IDV) of the Vehicle
6 months or below 5%
More than 6 months but less than 1 year 15%
More than 1 year but less than 2 years 20%
More than 2 years but less than 3 years 30%
More than 3 years but less than 4 years 40%
More than 4 years but less than 5 years 50%



  • Additionally for vehicles aged more than 5 years the IDV is determined via a mutual agreement between the policyholder and the insurance provider.
  • However for vehicles older than 5 years or an obsolete model the IDV is estimated based on the condition of the car the state of its body parts etc. The value in this case is assessed by the authorized surveyors the cost of which is borne by the insured.
  • For example  the IDV of a car that has a listed price of 60000 but was purchased two years ago in 2018 will be calculated as:
    • IDV:  60000  20% (60000) = 480000

Even though the policy applicant paid 10000 for registration at the time of purchase the amount will not be included in the calculation of IDV.

What factors are considered in the calculation of IDV?


  • Year of manufacture of vehicle
  • Model of the vehicle
  • Registration date of the vehicle (as stated on the registration certificate (RC))
  • State/city of vehicle registration
  • Fuel type of vehicle
  • Type of auto insurance policy
  • Tenure of insurance plan

Is Higher IDV better?


  • The IDV of a vehicle should be the true representation of its current market value. It should neither be higher or lower than the actual value. Since IDV is directly proportional to the premium charged by the insurance company hence it is very critical that the estimate is as close to reality as possible.
  • If the IDV of the vehicle is stated lower than its actual value it could be very disastrous. In this case when an unfortunate event happens  such as a car meets an accident or is stolen the amount reimbursed will be lower than the justified price.
  • Alternatively if the IDV is stated higher than the actual market price the insured will still suffer typically because IDV is directly proportional to the premium charged by the insurer. Hence in case of a higher IDV the policyholder will need to pay more premiums which could cause a huge dent in the pocket.
  • Overall it is advisable to not blindly buy a policy with lower premiums since that reflects a lower reimbursement. Moreover lower premiums may also indicate that the coverage is limited. In all it is best to get an IDV that is true to the actual value of the vehicle. But when compared a higher IDV is better suited than a lower IDV if the budget of the insured permits.

Can we change IDV to reduce insurance premium?


  • Yes the IDV can be altered to reflect a lower value of the vehicle. This will in turn lower the premium charged by the provider.
  • However the strategy would backfire since a lower-than-actual IDV would imply that a part of the loss will be borne by the policyholder in case of theft or loss of the vehicle. This is because the amount reimbursed will be lesser than the actual price of the vehicle the policyholder will end up bearing the brunt.
  • Thankfully with Royal Sundaram one can be sure of getting the true and hassle-free IDV security for two-wheelers and car insurance policies.


Overall buying motor insurance is a long-term investment. The basic reason for buying two-wheeler insurance or car insurance is to secure compensation in the event of loss or theft of the vehicle. Hence when buying a motor insurance policy it is essential to evaluate all terms and conditions and specifically pay attention to the IDV as set by the company. The ultimate motto is to engage with a trusted insurer such as Royal Sundaram and secure an IDV which is a true representation of the vehicles value.



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