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What is IDV in Two Wheeler Insurance & How is it Calculated?
Jul 23, 2020

IDV in Two Wheeler Insurance: How is Insured Declared Value Calculated?

Two wheeler insurance is an essential tool that safeguards you from any financial hitch resulting due to accidental damages to your two wheeler and/or injuries suffered by you in unfortunate incidents such as natural calamities, theft, burglary etc.

What are the factors that decide the two wheeler insurance premium?

In India, it is mandatory to have a third party insurance policy for bike, the premium for which is decided by the IRDAI (Insurance Regulatory and Development Authority of India) and which changes every year.

While IRDAI does not mandate having a comprehensive two wheeler insurance policy, it is best advised that you opt for one, as it can take care of your finances, in case you lose/damage your vehicle due to natural calamities and/or unprecedented accidents.

Your bike insurance premium for your comprehensive two wheeler insurance depends on the following factors:

  • IDV
  • Cubic capacity of the vehicle
  • Age of the vehicle
  • Geographical zone
  • Add-on covers (optional)
  • Accessories (optional)
  • Previous NCB records (if any)

While all other terms are self-explanatory, let us understand what IDV means.

What is IDV?
IDV in insurance means Insured's Declared Value. It is calculated on the ex-showroom price of your two wheeler. IDV is fixed on the manufacturer's selling price, which includes invoice value & GST, excluding the registration and insurance charges. IDV of your two wheeler depends on the following factors:

  • Make of your vehicle
  • Model of your vehicle
  • Sub-model of your bike
  • Registration date

The more official definition of IDV is "the SUM INSURED for the purpose of the two wheeler insurance policy which is fixed at the commencement of each policy period for the insured vehicle".

As IDV is based on manufacturer's current listed selling price, it is subject to go down or depreciate. You can use the following table to know the depreciation rate for your two wheeler based on its age.

Age of the Vehicle % of depreciation
Not exceeding 6 months 5%
Exceeding 6 months but not exceeding 1 year 5%
Exceeding 1 year but not exceeding 2 years 15%
Exceeding 2 years but not exceeding 3 years 20%
Exceeding 3 years but not exceeding 4 years 40%
Exceeding 4 years but not exceeding 5 years 50%

IDV for the vehicles older than 5 years is decided after a discussion and agreement between you and your insurer.

IDV for the new vehicles is 95% of their ex-showroom price. Hope this information on IDV helps you take an informed decision to buy the right insurance policy for your bike/two wheeler. You can get more information on the features and benefits of a two wheeler insurance policy by visiting our website. You can also determine your premium with a two wheeler insurance premium calculator .

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