Find out what IDV in car insurance means, how it is worked out, and why it matters at claim time. Read the simple guide, then get a quote that fits you.
IDV stands for Insured Declared Value. It is your car's current market value, as agreed with the insurer. It is the most money the insurer will pay if your car is stolen or totally damaged. IDV is roughly the maker's listed price minus depreciation for the car's age.
What IDV means in simple words
Think of IDV as the "sum insured" for your own car. It is not what you paid for the car. It is what the car is worth today.
A car loses value every year as it gets older. This loss is called depreciation. So the IDV of a car goes down as the car gets older.
Your IDV is fixed when you buy or renew the policy. It matters a lot at the time of a big loss.
How IDV is calculated
The basic idea is simple:
IDV = the maker's listed price of the vehicle, minus depreciation for its age.
The older the car, the higher the depreciation, and the lower the IDV. Insurers also look at the car's make, model and variant when they set the value.
Accessories that are fitted outside the factory, like a music system or seat covers, are usually added separately, if you declare them. Check your policy wording to see how your insurer handles this.
When IDV is used
IDV is the maximum amount paid in two cases:
- Total loss: The car is so badly damaged that repair is not worth it, or it cannot be repaired.
- Theft: The car is stolen and not found.
For smaller damage, the claim is based on the repair cost, not the IDV. But IDV is still the upper limit of what you can get.
Why IDV matters
It affects your claim. If your IDV is too low, you may get less than you expect in a total loss.
It affects your premium. A higher IDV usually means a higher premium. A lower IDV usually means a lower premium.
It affects your safety net. The right IDV helps you replace the car, or most of its value, after a big loss.
This is why it is not smart to pick a very low IDV just to save on the premium. You may regret it later.
Should you choose a high or low IDV?
Many insurers let you adjust the IDV within a range. Here is how to think about it:
- Too low: You pay less now, but get less if the car is stolen or totally damaged.
- Too high: You pay more now, and the insurer may not pay more than the car's real market value anyway.
- Just right: Close to the real market value of your car.
A fair IDV is usually the best choice. Compare it with the price of a similar used car in your area.
IDV and renewal
Your IDV can change at every renewal because the car is a year older. Do not just accept the number. Check it each time.
If you want to see what a renewal will look like, visit our renew vehicle insurance page. You can also read how to deal with a late renewal in our post on how to renew expired car insurance.
IDV for third-party policies
A third-party policy does not cover your own car, so there is no IDV that matters for your car's damage. IDV is part of the own-damage cover in a comprehensive policy. See our comprehensive insurance page to learn more.
Other things linked to IDV
Deductible: This is the part of each claim you pay yourself. It is separate from IDV.
Return to invoice add-on: This add-on may pay the invoice value of the car in a total loss or theft, instead of just the IDV. Terms differ by insurer, so check your policy wording.
NCB: Your No Claim Bonus is a discount on the own-damage premium. It does not change the IDV. See our no claim bonus page.
Tips to get the IDV right
- Check the IDV on your quote before you pay.
- Compare it with the market price of a similar car of the same age.
- Do not cut the IDV too far to save on the premium.
- Declare any extra fitted accessories, if your insurer allows it.
- Check the IDV again at every renewal.
If you have questions, our FAQ page may help. When you are ready, you can get a quote.
Rules and methods can change, and each insurer may follow its own steps. Your policy document is the final word.
FAQs
What is a good IDV for my car?
A good IDV is close to your car's real market value today. Check the price of a similar used car to judge it.
Does a higher IDV mean a higher premium?
Usually, yes. A higher IDV usually means a higher premium, and a lower IDV usually means a lower one.
Is IDV paid for every claim?
No. IDV is the maximum paid for total loss or theft. For smaller damage, the claim depends on the repair cost, as per policy terms.
Does IDV change every year?
Usually, yes. The car gets older and loses value, so the IDV is usually lower at each renewal.
This guide is for information only. Rules and policy terms can change, and the policy document is final. Please read your policy wording.