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Understanding IDV in Bike Insurance
Nov 21, 2023

IDV in Bike Insurance: Everything You Need to Know

When it comes to safeguarding your beloved two-wheeler, having the right insurance coverage is essential. Bike insurance not only provides financial protection against accidents and theft but also offers peace of mind. One crucial aspect of bike insurance that every owner must understand is the Insured Declared Value (IDV). It is a significant factor in determining the coverage and premium of your bike insurance policy. Imagine the unfortunate scenario where your bike is stolen or severely damaged beyond repair. In such cases, the IDV is a determining factor for the coverage you would receive from the insurance company. This article will delve into the importance of IDV in bike insurance and how it is calculated.

What is Depreciation?

Depreciation refers to the gradual decrease in the value of your two-wheeler over time due to factors such as age, wear and tear, and market fluctuations. As your bike ages, its value depreciates, which is why it is important to understand how depreciation is considered while determining the IDV.

What is IDV in Bike Insurance?

IDV, or Insured Declared Value, is the maximum sum assured provided by an insurance company in the event of a total loss or theft of your bike during the policy period. It represents the current market value of your two-wheeler after deducting the depreciation value. The IDV serves as the basis for calculating the premium for your bike insurance policy.

Importance of IDV in Bike Insurance

The IDV in bike insurance holds immense importance as it directly impacts both claim settlements and premium calculations for your two-wheeler policy. Here are few examples of the same:

Claim Settlement

The IDV determines the maximum amount you can receive in the event of a total loss or theft of your bike. Therefore, it plays a crucial role in claim settlements. It is essential to ensure that your bike's IDV is calculated accurately to avoid any financial setbacks during a claim.

Premium Calculation

The IDV directly affects the premium amount you pay for your bike insurance policy. As the IDV increases, the premium also tends to be higher. It is crucial to strike a balance between the IDV and the premium to ensure adequate coverage without overpaying.

Age and Depreciation

The IDV considers the age and depreciation of your two-wheeler. As your bike ages, its value depreciates. Therefore, the IDV decreases each year during the policy renewal. Understanding this concept helps you assess the value of your bike and the corresponding coverage you need.

IDV Calculation for Two-Wheelers

The IDV of your bike is calculated based on the manufacturer's listed selling price and the age of the vehicle. Insurance companies follow a standard formula to calculate the IDV, which is as follows: IDV = Manufacturer's Listed Selling Price - Depreciation Depreciation is determined based on the age of the two-wheeler as per the following rates:
Time after Vehicle purchase Percentage of depreciation
Up to 6 months  5% depreciation
Between 6 months and 1 year  15% depreciation
Between 1 year and 2 years  20% depreciation
Between 2 years and 3 years  30% depreciation
Between 3 years and 4 years  40% depreciation
Between 4 years and 5 years  50% depreciation
After 5 years, the IDV is determined based on mutual agreement between the insurance company and the policyholder.

Using an IDV Calculator for Two-Wheeler Insurance

To simplify the process of calculating the IDV for your bike, many insurance companies offer online IDV calculators. These calculators consider the make, model, manufacturing year, and other relevant details to estimate the IDV accurately. By using an IDV calculator for two-wheeler insurance, you can quickly determine the approximate IDV of your two-wheeler and choose the right insurance policy accordingly.

Tips for Selecting the IDV

Consider the Age

Select an IDV that adequately reflects the current market value of your bike. If you opt for a lower IDV, you may receive a lower bike insurance claim amount during a total loss or theft. On the other hand, choosing a higher IDV may result in a higher premium.

Analyse Your Bike's Value

Assess the market value of your two-wheeler, considering factors such as its condition, mileage, and any modifications. This will help you determine the appropriate IDV.

Research and Compare

Research different insurance policies and compare the IDV and premiums offered by various insurers. This will help you make an informed decision and choose the policy best suiting your requirements.


Understanding that the significance of IDV in bike insurance is crucial for every two-wheeler owner. It directly impacts the claim settlement process and the premium you pay for your policy. By accurately calculating the IDV and selecting the right coverage, you can protect your bike from potential financial losses. Remember to use an IDV calculator and compare insurance policies to make an informed decision. Stay informed and safeguard your two-wheeler with the right bike insurance policy.   *Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

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