Insured Declared Value and Total Loss - An Insight

More often than not, the insured find themselves in a fix and anxiety takes over when their insured vehicle is seriously damaged and/or destroyed. Judgements about actual losses exceeding the sum insured make them even wearier. Let us thus make the understanding of Insured Declared Value easier.

The Concept of Insured Declared Value (IDV)

The Insured Declared Value is the amount that is fixed at the beginning of each policy period of the insured vehicle. This IDV is deemed to be the 'Sum Insured', i.e. it is the maximum amount your insurance company will indemnify in the event of damage/loss.

Computation of IDV

IDV is fixed based on the following two factors:
(1) Manufacturer's Listed Selling Price (of the Vehicle and Accessories if any fitted to the Vehicle)
(2) Depreciation based on Age of the vehicle

Insured Declared Value (IDV) = Manufacturer's Listed Selling Price + Value of Car Accessories - Depreciation

Based on the factual age, the following schedule* chalks down the basis of depreciation percentages that are needed to be applied to (1) above. The price to be considered by the insurer is the current listed price at the beginning of policy period/renewal.