Knowledge Centre

What is IDV in Two Wheeler Insurance?

Published on April 22, 2019. EST READ TIME: 5 MIN

While buying insurance, we tend to think of the worst and most of us often wonder, “What if my two-wheeler is completely damaged, irreparable or stolen?” Well, this is what makes IDV (Insured Declared Value) critical.

What is IDV?

Insured Declared Value is the total value of the insured vehicle by the insurer to compensate the policy holder with in case of irreparable damage or total loss due to accident or theft. .IDV depends on the manufacturer’s listed selling price and then it is adjusted for depreciation. The following table explains how depreciation affects bike insurance IDV.

Age of the two wheeler Depreciation percentage deducted to calculate IDV
Six months old or lesser 5%
Between 6 months to 1 year 15%
Between 1 year to 2 year 20%
Between 2 year to 3 year 30%
Between 3 year to 4 year 40%
Between 4 year to 5 year 50%

IDV and Premium

The premium rate is applied on the IDV. The more the IDV, the more will be the premium of two wheeler insurance premium. As the two wheeler becomes old, the IDV decreases and thus the premium also decrease.

At the time of buying two wheeler insurance policy, the policyholder needs to be careful as sometimes lower premium rates are offered to attract customers but this will also mean that the two wheeler will be insured at a lower IDV and thus at the time of a mis happening, its entire value will not be compensated. At the time of buying insurance, the policy holder must make sure that the IDV is neither understated nor overstated.

Apart from IDV, here is a list of some other two wheeler insurance related terms that you must be aware of.

  • Own Damage Premium: This section provides protection to your vehicle against damages due to any impact damage, natural causes such as earthquake, flood, storm, fire and other natural disasters.

  • Zero Depreciation Cover: This is offered as an add on cover on payment of additional premium. Generally depreciation is taken into account while compensating for the loss but in case of zero depreciation cover, one can avail cover without accounting for depreciation. This results in greater coverage of the partial losses

  • No Claim Bonus: The insurance provider rewards responsible police holder in case of no claims in the preceding year by offering a discount on the renewal own damage premium for the next year.

  • Third Party Cover: This cover protects the policy holder against any financial or legal liability towards the third party involved in the accident.

  • Personal Accident Cover: General insurance covers any damage made to the two wheeler, so in addition to that personal accident cover accounts for death or injury by the policy holder involved in an accident. This cover safeguards the policyholder against unforeseen circumstances causing death or disability.

We, at HDFC ERGO, offer the most affordable, comprehensive, flexible two wheeler insurance policies with some of the most striking features aimed at providing utmost comfort and peace to the policyholder. On our website, find out your two wheeler insurance premium calculator. Your ride on the two wheeler will be completely safe with HDFC ERGO.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before going ahead with 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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