Introduction:
IDV stands for “Insured Declared Value“. It is a term often used in the insurance industry, especially in auto insurance. IDV means the maximum amount that an insurance company has to pay to the policyholder in case of theft or total loss of the insured vehicle.
What Does IDV Mean: In simple words the IDV is considered as current valuation of the asset/ liability.
The IDV is calculated by considering various factors such as the age of the vehicle, depreciation cost and the selling price of the motor Vehicle. Insurance companies generally use predefined formulas and guidelines to calculate IDV.
Understanding IDV is very important coz it helps policyholders, to determine the premium of the insurance. It is important to note that IDV always decreases as time passes due to depreciation. So, it is always recommended that we should check and review the IDV value of our vehicle time to time.
Factors Affecting IDV:
The IDV value of a vehicle always depend on some of the important factors these are as discussed below:
1. Age and Condition of the Vehicle
In simple term, IDV value of a vehicle always decreases with increase in the age of Vehicle (that is as vehicle gets older the valuation becomes cheaper) as the vehicle is depreciating in nature.
If we insured a vehicle and by chance, there accident happens and the car is to be repaired and we take insurance claim then also the IDV value of the vehicle decreases. As the condition of the vehicle became poorer the earlier.
2. Depreciation
The automotive vehicle is always considered as depreciative in nature and as the vehicle becomes older the valuation (the IDV) of vehicle always decreases.
3. Add-ons and Accessories
The insurance companies always know that the Add-On’s and the accessories doesn’t directly affect the IDV. Add-On’s means if we want any extra facility for example On location Mechanic Repair(Roadside Assistance), Zero Depth Accidental Cover,Engine Protection Add-on Cover,Key Loss Add-on Cover,Tyre Damage Add-on Cover. And for accessories the age of accessories as metal parts of vehicle corrodes with time, rubber and plastic related parts life decreases with time so, the IDV is decreases as the valuation of corroded parts and plastic parts tends to destroyed.
Conclusion:
In this Article we have discussed about What Does IDV Mean in detail. Here IDV stands for “Insured Declared Value”. It is a term often used in the insurance industry, especially in auto insurance. IDV means the maximum amount that an insurance company has to pay to the policyholder in case of theft or total loss of the insured vehicle. In simple words the IDV is considered as current valuation of the asset/ liability.
The IDV is calculated only after considering several factors such as the age of the vehicle, depreciation The IDV is calculated by considering various factors such as the age of the vehicle, depreciation cost and the selling price of the motor Vehicle. Insurance companies generally use predefined formulas and guidelines to calculate IDV.
Understanding IDV is very important coz it helps policyholders, to determine the premium of the insurance. It is important to note that IDV always decreases as time passes due to depreciation. So, it is always recommended that we should check and review the IDV value of our vehicle time to time
What Does IDV Mean FAQ’s
How IDV Affects Insurance Premiums?
IDV value of vehicle directly affects the insurance premium. If the IDV Value of the Vehicle is Higher, the insurance premium will also be higher. So, we need to be careful while selecting the insurance premium and the deciding the IDV value.
What Does IDV Mean?
IDV stands for “Insured Declared Value”. It is a term often used in the insurance industry, especially in auto insurance. IDV means the maximum amount that an insurance company has to pay to the policyholder in case of theft or total loss of the insured vehicle. In simple words the IDV is considered as current valuation of the asset/ liability.
Does the IDV impact third-party liability coverage?
Yes, the IDV impact third-party liability coverage, If there is any third party damage due to an accident, the IDV value decides important role in deciding the and calculating those damage.
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