Knowledge Centre

Know The Impact of IDV On Renewing Bike Insurance

Published on September 20, 2019. EST READ TIME: 5 MIN

The insured declared value (IDV) of your bike plays an important role in determining the premium you are liable to pay to get the desired coverage. For this, understanding the concept of insured declared value is significant. In simple terms, the insured declared value is the maximum amount that you can claim for in case of loss or total theft of your vehicle. IDV depends on the manufacturer’s listed selling price and then it is adjusted for depreciation .The insured declared value of your vehicle changes at the time of renewal owing to the depreciation factor. The insured declared value of a new bike will differ from that of a five-year-old vehicle.

To understand how IDV has an impact on the premium of your bike insurance renewal, first, let’s understand how it is calculated.

How is the insured declared value of a vehicle calculated?

The insured declared value of a vehicle is calculated on the basis of the following formula:

IDV is arrived from manufacturer’s listed selling price and then adjusted for the depreciated amount depending upon the age of the vehicle. The vehicle’s registration and insurance costs are not calculated when calculating the IDV. The IDV of the accessories that are not a part of the original vehicle is calculated separately at an extra cost in case you want to insure them as well.

Insured declared value is inversely proportional to the age of the bike. As the bike ages, the IDV of the bike too decreases, thus affecting the premium you pay at the time of renewal.

Understanding the depreciation schedule followed under two-wheeler renewal premium calculation.

Age of the vehicle

Depreciation in %

Not less than 6 months


More than 6 months but not exceeding 1 year


More than 1 years but not exceeding 2 years


More than 2 years but not exceeding 3 years


More than 3 years but not exceeding 4 years


More than 4 years but not exceeding 5 years


Disclosing correct IDV during the time of bike insurance renewal

The insurance company follows the depreciation schedule when calculating the insured declared value of your bike. Many bike owners think that they can opt for a low IDV to pay less premium, but instead this is not in their hands and is completely dependent on the insurance company.

Things to note when renewing bike insurance

  • Check the overall premium quote and assess if its evaluated correctly on the basis of the IDV of the vehicle

  • Always renew bike insurance online to get the best deal as insurance companies offer online insurance policies at slightly lower cost.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales. This blog has been written by

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

S. Gopalakrishnan recommends "HDFC ERGO for your vehicle insurance needs, it has always put customer’s interest at the forefront, with round the clock assistance to deal with emergency breakdown issues and hassle free claims process. You can be assured of complete and reliable guidance through the whole process".

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