When buying bike insurance, one of the most important yet often misunderstood components is the IDV or Insured Declared Value. If you're wondering whether opting for a high IDV is a smart move, you're not alone. In this blog, we’ll walk you through what IDV means, how it affects your premium and whether choosing a high IDV is truly worth it.
What is IDV in Bike Insurance?
Let's first understand the basics:
- IDV stands for Insured Declared Value.
- It is the maximum sum that your insurer will pay you if your bike is stolen or declared a total loss due to damage.
- In simple terms, it’s the current market value of your bike.
The IDV in bike insurance is calculated by deducting depreciation from the manufacturer’s listed selling price of your bike. It does not include the cost of registration or road tax.
Why Does IDV Matter in Bike Insurance?
The IDV directly affects two key things:
- Claim Amount: A Higher IDV means a higher payout in case of a total loss or theft.
- Premium: Higher IDV leads to a higher premium. Since insurers promise to cover more, you’ll have to pay more.
So, when you choose a high IDV, you're essentially opting for better financial protection at a slightly higher cost.
Advantages of a High IDV
Let’s look at the benefits of selecting a higher IDV for your bike:
- Better Coverage: You get a higher sum insured in case of total damage or theft.
- Peace of Mind: Higher IDV ensures you’re closer to the actual cost of your vehicle.
- Quick Claim Settlement: The insurer has a fixed IDV amount to base the claim on, reducing disputes.
Disadvantages of a High IDV
Here are some potential drawbacks of high IDV:
- Higher Premium: Your annual insurance cost will go up.
- Not Always a Good Idea: If your bike is old, paying for a high IDV might not be financially smart.
- No Influence On Minor Claims: High IDV only matters in case of total loss or theft. For small repairs, the IDV isn’t relevant.
When Should You Choose a High IDV?
It makes sense to go for a higher IDV in the following scenarios:
- Your bike is new or relatively new
- You live in a theft-prone area
- You want maximum coverage regardless of premium
In such cases, the cost of a slightly higher premium is justified by the peace of mind and better compensation.
When Should You Avoid a High IDV?
Conversely, a lower IDV may make more sense if:
- Your bike is old and depreciated
- You hardly use your bike
- You are looking to reduce premium costs
Always strike a balance between what you’re paying and what you’ll receive in the worst-case scenario.
How to Determine the Right IDV?
Here’s how you can decide:
- Check the age and condition of your bike
- Understand the depreciation
- Assess your risk (usage, location, theft rate)
- Compare premium versus benefit
Never blindly accept the IDV set by the insurer. Most insurers allow you to tweak the IDV within a specified range.
IDV In Third-Party Vs Comprehensive Bike Insurance
- Third-Party Bike Insurance: No concept of IDV. It only covers liabilities towards third parties.
- Comprehensive Bike Insurance: IDV matters as it covers damage to your own bike, theft, natural disasters and accidents.
So, IDV is only applicable if you opt for a comprehensive bike insurance policy.
Conclusion
A high IDV in bike insurance offers better coverage and peace of mind. However, it also raises your premium. The key lies in finding a balance.
If your bike is new or high-end or you live in a high-risk area, a higher IDV is a smart choice. But for older bikes or for infrequent usage, a moderate IDV might serve you better. Always review your needs, risks, and budget. The goal is not just to pay a lower premium but to get adequate protection.