IDV (Insured Declared Value) is the maximum amount your car insurer will pay if the vehicle is stolen or damaged beyond repair. It represents the car's current market value — broadly the ex-showroom price minus age-based depreciation on a schedule set by IRDAI. Your own-damage premium is calculated on the IDV, so it directly shapes both cost and cover.
How it works
The depreciation schedule starts at 5% for a car under six months old and rises with age (about 15% at one to two years, up to 50% at four to five years); registration and insurance costs are excluded from the calculation. So a brand-new car with a ₹10 lakh ex-showroom price gets an IDV of roughly ₹9.5 lakh in year one. Insurers usually let you adjust the IDV within a small band around this computed value.
Why it matters when buying
A lower IDV means a cheaper premium — which is why some quotes look suspiciously attractive. But if the car is stolen or totalled, the payout is capped at that lowered IDV, and you absorb the gap. When comparing policies at the showroom or online, first make the IDVs equal, then compare premiums; our guide on dealer vs online car insurance shows how dealers and aggregators play this differently.
A concrete example
Two quotes for the same new ₹10 lakh car: one prices the policy on a ₹9.5 lakh IDV, the other saves you ₹2,000 by quietly setting IDV at ₹8.5 lakh. If the car is written off, that "saving" costs you ₹1 lakh.