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What is IDV in bike insurance?

If you were looking to buy insurance for your two-wheeler, you want to make sure that you’re getting the best bike insurance possible. When you first buy insurance, your vehicle’s IDV is taken into consideration. But what exactly is IDV and how does it play a role in your insurance? Read on to find out.

What is IDV?

IDV stands for Insured Declared Value, and it is the total value of your insured two-wheeler that your insurance provider will have to pay in the case of total damage or theft of your bike. This is the sum insured, and it is the amount that will be paid when you make a claim.

Why is IDV important?

The premium you pay for your two-wheeler insurance is determined by your vehicle’s IDV. If the IDV offered by your insurance provider is lower, then so will the premium you pay. But that also means that when you do make a claim, the amount you receive might not cover all the costs.

For example, say Mr.X got into an accident in which his bike was damaged beyond repair. He goes to his insurance provider to make a claim. He had chosen this insurance provider due to the low premium rates they provided, without paying much attention to his vehicle’s IDV. Now, when Mr.X makes his claim, he does not receive the total value of his bike and the claim amount he receives is a lot lower than what the vehicle is worth. This is why it’s important to pay attention to your vehicle’s IDV.

How is IDV calculated?

Your IDV is calculated taking into consideration your bike’s current market value and depreciation. Your two-wheeler goes through a certain amount of depreciation (regular wear and tear of your vehicle) every year, and this depreciation is taken into account when calculating your IDV. This is also an accounting principle.

Here are the depreciation rates for your bike, depending on its age.


Age of the Bike

Depreciation %

Less than 6 months


6 months to a year


Between 1 to 2 years


Between 2 to 3 years


Between 3 to 4 years


Between 4 to 5 years


Beyond 5 years, the IDV of the two-wheeler will be mutually discussed by the insured and the insurance provider, and its value will be agreed upon.

When does the IDV come into play?

When it comes to insurance policies you can buy for your vehicle, there are usually two main policies - Third-Party Insurance, or Own Damage Insurance. A Comprehensive policy would include both these policies as one bundled insurance policy. When taking an Own Damage or Comprehensive policy, your IDV would be calculated to determine your premium.

To sum up, when buying two-wheeler insurance online, make sure to do your research on your bike’s market value and calculate your IDV before choosing a policy, as their low premium rates could be because they haven’t taken your bike’s actual value into consideration. At Chola MS, we offer you the optimum IDV for your two-wheeler because we want to make sure that you and your vehicle are well-protected. To know about our policies, premium rates, and add-ons, click here.


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