How is IDV Calculated in Two-Wheeler Insurance?


The purchase of a comprehensive bike insurance policy can help you protect your vehicle from damage repair costs. Insurance for your 2-wheeler provides you with financial protection against the damage caused to your bike through accidents, natural disasters, theft and so on. Apart from this, the insurance policy also provides financial assistance for third-party liabilities which may arise due to injuries to other individuals or property. The financial coverage you get from the insurance company will heavily depend on your two-wheeler’s IDV.

What is Insured Declared Value?

The IDV or Insured Declared Value is the highest maximum sum assured that a policyholder is liable to get if the insured vehicle is stolen or damaged beyond repair. IDV is the existing market value of the two-wheeler, and so, the amount you are to receive should be equal to the market value of the bike. When you buy bike insurance, ensure that you settle for the correct IDV and not one that is too low, only to save some cost on the premiums. 

How is IDV calculated in two-wheeler insurance?

IDV is simply the bike’s existing market value after deduction of bike registration cost and the adjustment of the depreciation. The IDV of a bike is determined depending on the selling price listed by the manufacturer. However, during the renewal of bike insurance, the depreciation cost of the parts is also considered. The cost of the insurance policy and registration is not included in the IDV. To get the bike’s accessories insured separately, you may have to pay extra. Before buying insurance for bike online, take a look at the depreciation table for the IDV online.

The table will illustrate how the age of the vehicle affects the IDV:

Age of the two-wheeler Depreciation to determine two-wheeler’s IDV
Exceeding 6 months 5%
Exceeds 6 months but less than one year 15%
Exceeds one year but less than two years 20%
Exceeds two years but less than three years 30%
Exceeds three years but less than four years 40%
Exceeds four years but less than five years 50%

If your vehicle’s age is more than 5 years, then the IDV is determined depending on the condition of the parts and the bike’s condition. Also, if the vehicle is older than 5 years, and the model is outdated, the insurer and the insured can determine the IDV based on a mutual agreement, after the company surveyor assesses the bike.

Factors that affect the IDV:

  1. Registration date of the bike
  2. Age of the bike 
  3. Registration city 
  4. Make, model and type 
  5. Type of fuel used
  6. Bike insurance policy term 

Significance of IDV:

As mentioned above, the IDV is the amount you are provided with if your two-wheeler gets stolen or severely damaged. Settling on the correct IDV is absolutely important. It will only help you if you get the IDV closest to the bike’s market value. Getting such an IDV will help you with fair compensation at the time of filing a claim. Many insurance companies also allow bringing the IDV down by about 5-10% with the percentage completely depending on the policyholder. While a low IDV means a low rate on the premium amount, in case of severe damage to the two-wheeler, this may be inadequate for covering the costs.

At the time of IDV calculation, either for first purchase or policy renewal, the bike’s original price is not considered. You must ensure that you do not declare an IDV for your bike lower than the bike’s market value. The opposite of this is also true. Declaring a high IDV to claim a high amount is also not profitable for the policyholder. When the claim is filed, the bike’s age is considered for finalizing the claim, and the bike’s calculated depreciation will depend on this. Hence, the amount you get from the claim will be low even with a high IDV. When you do so, you make a total loss claim, leading to you receiving an amount lower than what you are entitled to get. It is always beneficial to declare the correct IDV and prevent this loss in the long run.

What makes bike insurance a necessity in India?

Some parts of India have roads that make bike-riding feel like a pleasant dream. However, the roads in most other cities and towns are not that wonderful. Bike insurance is one of the ideal ways to protect your two-wheeler against damage. Since a third-party bike insurance cover is compulsory, most bike owners make it a point to have one. But when it comes to a comprehensive bike insurance cover, people always miss out on it to save costs. However, this actually becomes an expensive error when there is accidental damage to the bike. By having a comprehensive cover for your bike, you can ensure peace of mind for yourself. 


To save yourself from high costs for your bike’s repair, it is always better to buy bike insurance. One of the main factors that determine your bike insurance premium is the IDV. When looking at bike insurance quotes from different companies, this could help you choose the correct policy. To make the process easier, you can make use of IDV calculators available online.