Last year, a customer came to us frustrated after receiving only ₹3.8 lakh for his stolen Maruti Swift — a car he had bought for ₹7.2 lakh four years earlier. His insurer had set the IDV at renewal and he had signed without checking. This guide is for everyone who does not want to be in that situation.
What Is IDV?
Insured Declared Value (IDV) is the maximum amount your insurer will pay in case of total loss (theft or total damage beyond repair). It is not the market value you could get from a buyer — it is a depreciated value calculated using IRDAI's depreciation schedule.
How IDV Is Calculated
The IDV Trap: Too Low vs Too High
Too low (underinsurance): Lower premium, but you get less in a total loss claim. If your car is worth ₹6L and you insure it for ₹4L, you will feel cheated when theft happens.
Too high (overinsurance): Higher premium, but the insurer will only pay the actual market value at the time of claim — not the inflated IDV. You are paying extra for nothing.
The sweet spot: set IDV 5–10% higher than the standard depreciated value, especially for newer cars. The premium increase is minimal (₹200–₹500/year) and provides meaningful extra protection.
Add-Ons That Work With the Right IDV
- Zero Depreciation Cover: Removes depreciation from spare parts claims. Essential for cars under 3 years old.
- Return to Invoice (RTI): In total loss, pays the original invoice value — not the depreciated IDV. One of the most valuable add-ons for cars under 2 years old.
- Engine Protection: Covers damage from water ingression or oil leakage — standard policies exclude this. Critical in Bengaluru's waterlogging-prone areas.
What To Do at Renewal
Do not auto-renew. Every year, compare IDV offers across at least 3 insurers. Use our Motor Insurance Comparison tool to see Tata AIG, Bajaj Allianz, and others side by side — with add-on prices included.
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