Current market valuation of vehicle after deducting standard depreciation.
Insured Declared Value (IDV) is the maximum Sum Insured amount payable by a general insurance company in the event of total loss, constructive total loss, or theft of your vehicle. It reflects the current market value of the vehicle after deducting standard age-based depreciation from the manufacturer's listed selling price.
A new car bought for ₹10 Lakhs has an IDV of ₹9.5 Lakhs (5% depreciation) in Year 1. In Year 2, IDV becomes ₹8.0 Lakhs (20% depreciation). If the car is stolen in Year 2, the insurer pays ₹8.0 Lakhs.
Setting a lower IDV artificially reduces your policy premium, but results in severe financial loss if your vehicle is stolen or suffers total accident damage.
Many policyholders misunderstand this clause until a claim actually occurs. Always verify the exact definitions in your policy wording schedule rather than relying on verbal marketing summaries. Disclose all material facts truthfully at the time of proposal to help ensure smooth claim assessment without non-disclosure issues.
Standard IRDAI depreciation schedule: Up to 6 months (5%), 6 months - 1 yr (15%), 1-2 yrs (20%), 2-3 yrs (30%), 3-4 yrs (40%), 4-5 yrs (50%). Vehicles over 5 years old are valued based on mutual agreement between owner and insurer.
Always set correct IDV matching market value to ensure maximum claim payout during theft or total loss.
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