There are several jargons that youare bound to come across when buying a bike insurance policy. One such term isthe IDV which stands for Insured Declared Value. This is one of the mostimportant aspects you need to keep in mind before purchasing a two-wheeler insurancepolicy. 

Let us find out what the IDV is andwhy it is important. 

To know why you need to consider theIDV while buying a bike insurance policy, you need to understand its basicconcept. The IDV is the maximum amount of money that an insurance company willbe paying the policyholder in case of theft or total damage to the two-wheeler.This would be the highest amount that the insurance company would pay in caseyou need to make a claim. As you would want to get the most out of your motor insurance  coverage, the IDV is definitely a figure of extreme importance. 

How is the IDV calculated?  

When you are looking to buy or renewa bike insurance policy, the IDV of your bike will generally be calculated byadjusting the standard rate of depreciation with the manufacturer’s marketvalue of the bike. These are the factors that insurance companies considerwhile calculating the IDV: 

- Bike registration details 

- Model of the vehicle 

- Vehicle description 

- City in which the vehicle isregistered 

- Manufacturer Ex-showroom price  

IDV affects the premium of your bike insurance policy 

Premiums for bike insurance policies are directly proportional to the IDV. Here’s how: 

Lower IDV – Lower premium  

By declaring a lower IDV, you can save on yourbike insurance premium. However, you should keep in mind that your claimcompensation would total a lesser amount since your IDV sum is low. Keepingadequate compensation in mind, you should be careful about choosing an accurateIDV so as to get good coverage and get affordable premiums.

Higher IDV – Higher premium 

You would get better compensationwhen you declare a higher IDV. However, you should be careful about notoverestimating the market value of your bike since it will unnecessarily hike your policy premium. 

Here’s what you should keep in mind!  

A lot of policyholders understate the IDV of their motor vehicles. They do this to decrease the premiums of their bikeinsurance policies. However, this is not an advisable option since the insurance coverage would be quite less. If your bike unfortunately suffers from total loss in an accident, you would end up receiving far less than the vehicle is worth. This does not mean that you should overstate your IDV just to get an increased cover in case you have to make a claim. A higher IDV is not going to get you a better price when you decide to sell your bike.  

We hope that this article has beeninformative.