What is IDV For Car Insurance?

Insured Declared Value (IDV) is the highest amount payable by your insurance company in the case of an accident. Essentially, it's the current market value of your car. Your car's IDV is required by insurers in India to purchase a comprehensive car insurance policy, so it's important to know how to calculate it and how it affects your annual policy cost.

What is the Meaning of Insured Declared Value (IDV)?

Insured Declared Value (IDV) is the current market value of your car. IDV is required to purchase comprehensive car insurance in India, and determines the maximum amount you're able to claim from your insurer in case of an accident. For example, if the IDV of your new Honda Amaze is Rs. 8 lakhs, the most your insurer can compensate you in the case of an accident is Rs. 8 lakhs.

There are three factors in determining the IDV of your car:

  • Age and depreciation of your car - the older your car is, the higher its risk and the lower its IDV. By following the depreciation schedule, you can determine how much your IDV should be adjusted based on your car's age.
  • Make and model - more expensive, luxury cars will cost more to repair and require a higher IDV, while less expensive, more commonly driven sedans will cost less to repair and command a lower IDV.
  • City of registration - if you register and use your car in a major city like Mumbai or Delhi, there is a greater risk of accident than if you do so in a rural town, so the IDV will be higher.

How to Calculate IDV

Calculating the correct IDV for your car is important, because your annual premium price depends on it. The calculation is actually quite a simple one, especially if you have not added any accessories to your vehicle. To find your car's IDV, take the listed price from the manufacturer and subtract the depreciation amount, which is determined by the below table:

Age of CarPercent Depreciation
0-6 months5%
6 months - 1 year15%
1-2 years20%
2-3 years30%
3-4 years40%
4-5 years50%

For cars greater than five years old, IDV will be determined by an assessment of the car and an agreement between the insured and the car insurer.

If you've added accessories to your car, such as a fuel kit, you'll need to factor those into the IDV as well. To do so, use the same depreciation schedule and subtract the depreciated amount from the listed price of the accessory. Then, add it to the IDV that you've already calculated for your car.

Bar graph showing IDV for four different car models
Bar graph showing IDV for four different car models

Some car insurers, like Reliance General Insurance and Bajaj Allianz provide IDV calculators right on their website, so you can quickly determine how much your car is worth before entering the quoting or purchasing process. India's General Insurance Council also provides a calculator, if you've yet to select an insurance company or if your insurer does not provide one.

How Does IDV Affect Your Annual Premium Price?

Annual premium prices are closely tied to your car's IDV, and play a key role in determining how much you'll pay for car insurance. There are advantages and disadvantages to cars with both high and low IDV, but it's important to submit an accurate value to avoid any obstacles during the claim settlement process.

Cars with a high IDV will receive a higher compensation for a submitted claim, but in exchange, will be responsible for paying expensive annual premiums. Conversely, cars with a low IDV will have cheaper annual premium prices, but will receive much lower compensation in the unfortunate case of an accident.

High IDVHigher maximum claims compensationExpensive annual premiums
Low IDVCheap annual premiumsLower maximum claims compensation

While inputting a false IDV for your car is never recommended, many car insurers in India allow you to toggle the IDV amount during the quoting and purchasing process online. Companies like Bharti Axa and HDFC Ergo provide a field for consumers to enter the IDV of their car. Your annual premium price will adjust each time you alter the inputted IDV, and give you a good idea of the impact of your car's value on your policy costs. This is especially useful for consumers who are being proactive and obtaining multiple quotes to decide on the best car insurance for their lifestyle.


To complete our guide to Insured Declared Value (IDV), we analysed and explored 16 insurer websites and collected pricing, benefits and inclusions data from over 300 car insurance quotes. We gathered quotes for both a new and used Honda Amaze, the Maruti Vitara Brezza and the Mercedes-Benz E-350 to analyse annual costs for new and used sedans, SUVs and luxury cars.

To further study, we gathered quotes for these car models across three cities: Mumbai, New Delhi and Bengaluru. We also conducted research from the India General Insurance Council to analyse the rules and values that factor into Insured Declared Value in India.

Mike Wagenman

Mike Wagenman is a Senior Research Analyst at ValueChampion India, specializing in insurance. He holds a Bachelor of Arts degree in Communication and Business from Rider University, and his prior work experience includes data, revenue, and business analysis in the international travel and technology markets. Mike has worked with clients around the world to help identify financial value and find the most optimal way to achieve success.