Insured Declared Value (IDV) in Bike Insurance

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Even today when people buy insurance for their vehicles, most of them do it as a compulsion. One of the biggest reasons that people still do not willingly purchase motor insurance is the lack of understanding about how insurance works and how beneficial it can really be. Many people find it difficult to comprehend the various terms of an insurance policy and do what is the bare minimum.

Many insurance companies are trying to bridge this gap by simplifying insurance policies and helping customers understand the basics. In this article, we are going to discuss a key element in bike insurance policy, which is IDV. We will give you an overview of what IDV is, how it affects the insurance policy, how to calculate it etc. Read on to know more about Insured Declared Value of your two wheeler.

What is IDV in Bike Insurance?

IDV stands for Insured Declared Value. In simple words, it is the current market value of your two wheeler. It is calculated after taking out the depreciation on a bike.

Let us see this example, Rohan bought a brand new bike worth INR 2 lakhs, excluding registration charges, road tax, and the insurance cost. But as the bike got older, the price of the bike also reduced gradually. After a period of 2 years, due to depreciation, the IDV was around INR 1.25 lakhs.

IDV is calculated according to the ex-showroom price (invoice) and it need not necessarily be the price at which you want to resell the bike. If your bike is well-kept you may charge a higher price for the same.

Why is the Insured Declared Value Important?

It is important to be aware of the IDV of your bike. This information will come handy if your bike gets stolen or gets damaged beyond repair, then your insurance company will compensate you on the basis of the Insured Declared Value. It is the maximum liability that the bike insurance company will take regarding your bike.

IDV is a key element in fixing the premium you would have to pay towards your insurance policy.  When your bike has a higher IDV, it will mean a higher premium. However, this doesn’t imply that you understate the IDV of your bike in order to decrease the premium. Because after an accident, if a claim is to be made, the maximum claim amount would be the IDV; and if IDV is lower than the repair cost, the loss will be yours as you’d have to pay the rest of the amount.

IDV Calculator

The best way to calculate your two wheeler’s IDV is through an online calculator. Most of the online calculators are simple to operate and are self-explanatory. You would have to enter details of your bike and it would give you an estimate.

The IDV can also be easily calculated by using this formula:

IDV = The ex-showroom price of the bike MINUS Depreciation specified in the Indian Motor Tariff.

You need to keep it in mind that the ex-showroom price does not include registration cost, insurance, and other charges. Also, if you add accessories to your bike, they would add up in the IDV.

Depreciation Chart:

The rate at which a vehicle depreciation has been fixed by the Indian Motor Tariff, under the guidelines of IRDAI and is as follows:

Age of the BikeRate of Depreciation 
Within 6 months5%
6 months - 1 year 15%
1 year - 2 years20%
2 years - 3 years30%
3 years - 4 years40%
4 years - 5 years50%

For bikes that are more than 5 years old, the IDV can be decided mutually by the insurance company and the policyholder. The condition of the bike and its body parts are analysed when the IDV is set.

Factors That Determine Your Bike’s IDV

1. Age of Your Two Wheeler

IDV represents the market value of your two-wheeler. As the vehicle ages, the IDV comes down too.

2. MMV (Make, Model, Variant)

The make, model and variant of your bike directly impact the IDV. For example, a Royal Enfield Interceptor would have a much higher IDV than a Hero Honda Passion.

3. Registration Details (RTO)

The city in which a two-wheeler is registered influences the IDV to a certain extent. Bikes that are used in small towns and cities where the population is less are lower risk of accidents.

4. Depreciation

The minute you take your bike out of the showroom, standard rates of depreciation start to apply.  To find out the IDV, subtract this amount from the ex-showroom price.

5. Accessories

If you add accessories to your bike, they would also add up in the IDV.

How does IDV Affect Your Bike Insurance Premium?

The Insured Declared Value of your two-wheeler has a direct impact on the premium that you pay for your two-wheeler insurance policy. The higher the IDV, the higher would be the premium. 

Advantages & Disadvantages of Increasing and Decreasing IDV 

When it comes to declaring the IDV, it is better to be as accurate as possible, because increasing as well as decreasing the IDV comes with its own share of advantages and disadvantages. 

Declaring Lower IDV

If you declare a low IDV, the consequences would be:


  • The premium cost would come down


  • The claim amount that you get would also decrease

Declaring Higher IDV

If you declare a higher IDV


  • Your bike’s sum insured would increase
  • You can claim a higher value


  • You would have to pay more money towards the premium
  • Inaccurate IDV can also lead to rejection of claim

How to Declare Correct IDV for Your Two Wheeler?

If you need to declare the IDV of your bike, you can keep the following points in mind:

  • IDV for a New Bike
    When you buy a new bike it is easy to calculate the IDV. The depreciation value for a new bike is 0.05%, which is quite nominal. You can subtract this amount from the manufacturer’s price and calculate the IDV.
  • IDV for an Old Bike
    You can use this formula to calculate the IDV of your old bike: IDV = The ex-showroom price of the bike MINUS Depreciation specified in the Indian Motor Tariff.
    Apart from this, you can try going through the internet and find prices of other bikes with the same make, model and variant. One must also cater to factors like how well-maintained the bikes, how many repairs has it undergone, the depreciation value etc. You can then declare an IDV which is similar to the other bikes

IDV During Bike Insurance Renewal

When you have an understanding of what IDV is and what factors affect it, it would help you in analysing the premium amount correctly. Remember, declaring a higher IDV means that the premium to be paid would also be higher. On the other hand, if you declare a lower IDV, it would reduce the claim amount.

Points to Consider When Calculating Your Bike's IDV 

  • Try and declare an accurate IDV
  • IDV is the right value of your bike, it takes into account the factors like cubic capacity, MMV, how old is the bike etc
  • The premium that you pay towards the insurance policy is fixed on the basis of your bike’s IDV
  • IDV is the maximum amount that you will be able to claim in case your bike gets damaged or stolen

Insured Declared Value (IDV) in Bike Insurance FAQs

  • 1. Can I negotiate with my bike insurance company for a higher IDV?

    Yes, you can. However, if the company agrees to a higher IDV, remember you would have to also pay a higher premium for your policy.

  • 2. Can I calculate the IDV for my bike online?

    An online IDV calculator is the best way to calculate the IDV of your two-wheeler. Most of the online calculators are simple to operate and are self-explanatory. You would have to enter details of your bike and it would give you an estimate.

  • 3. Can I get a higher resale value for my bike on declaring a higher IDV?

    Though IDV is an important factor, keep in mind that it is not the only criterion when it comes to fixing a resale value as other factors like the vehicle's condition also highly influence its value.

  • 4. Does my vehicle's location of registration have an impact on IDV?

    Yes, the city in which a two-wheeler is registered influences the IDV to a certain extent. If your bike is registered in an accident prone area, then the premium is higher. Two-wheeler that are used in small towns and cities where the population is less are lower risk of accidents. People use their bikes for shorter distances and thus the two-wheeler may be better maintained.

  • 5. What is the IDV value of a new bike?

    When you buy a new bike, the IDV for a new bike up to 6 months is 95% of its ex-showroom price. Later, with time, depreciation increases and IDV decreases. 

  • 6. Why does IDV vary between bike insurance companies?

    Different insurance companies evaluate vehicle's damage risk differently. Different companies may use different strategies, and thus the IDV of the same bike may differ.

  • 7. What is the IDV of a bike outside the showroom?

    The minute you take your bike out of the showroom, standard rates of depreciation start to apply.  The depreciation value for a new bike is 5%. IDV is 95% of the ex-showroom price up to first 6 months. Then depreciation increases and IDV decreases.

  • 8. Is it wise to increase the IDV of my bike?

    Negotiating a little with the IDV is alright but increasing it too much may not be a good idea. You would not only be paying a higher premium, but an over-the-top IDV may also lead to rejection of the claim.

  • 9. Does the IDV of a bike reduce after every renewal?

    It is not the policy renewal that decreases the IDV of the bike, but the depreciation which is calculated on an annual basis. With every passing year, your bike's market value decreases, so the IDV.

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