Insured’s Declared Value (IDV) as per India Motor Tariff 2002; GR- 8:
“The Insured’s Declared Value (IDV) of the vehicle will be deemed to be the ‘SUM INSURED’ for the purpose of this tariff and it will be fixed at the commencement of each policy period for each insured vehicle.
The IDV of the vehicle is to be fixed on the basis of manufacturer’s listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance /renewal and adjusted for depreciation (as per schedule specified below). The IDV of the side car(s) and / or accessories, if any, fitted to the vehicle but not included in the manufacturer’s listed selling price of the vehicle is also likewise to be fixed.
The schedule of age-wise depreciation as shown below is applicable for the purpose of Total Loss/ Constructive Total Loss (TL/ CTL) claims only. A vehicle will be considered to be a CTL, where the aggregate cost of retrieval and / or repair of the vehicle subject to terms and conditions of the policy exceed 75% of the IDV.
Schedule of depreciation for arriving at IDV:
Age of the Vehicle Percentage of depreciation for fixing IDV
Percentage of depreciation for fixing IDV
Not exceeding 6 months - 5%
Exceeding 6 months but not exceeding 1 year - 15%
Exceeding 1 year but not exceeding 2 years - 20%
Exceeding 2 years but not exceeding 3 years - 30%
Exceeding 3 years but not exceeding 4 years - 40%
Exceeding 4 years but not exceeding 5 years - 50%
NOTE: IDV of vehicles beyond 5 years of age and of obsolete models of the vehicles (i.e. models which the manufacturers have discontinued to manufacture) is to be determined on the basis of an understanding between the insurer and the insured.
For the purpose of TL/CTL claim settlement, the IDV will not change during the currency of the policy period in question. It is clearly understood that the liability of the insurer shall in no case exceed the IDV as specified in the policy schedule less the value of the wreck, in ‘as is where is’ condition.
The IDV of vehicles aged over 5 years is calculated by mutual agreement between insurer and the insured, instead of depreciation.”
For vehicles less than 5 years of age: Since a standard maximum selling price of manufacturer is not available to the Insured and the Insurance companies through a centralized system, so various field functionaries of different companies are using their own way to arrive at ‘IDV’; though some of the companies have a centralized control whereas it is not available with many other companies. Thus, across general insurance companies, a variable ‘IDV’ is fixed for the same vehicle model (and other specifications like location), which leads to confusion in the minds of insuring public.
For vehicles above 5 years of age ,the problem is to arrive at a mutually agreed value for the vehicle to fix the ‘IDV’ .There are many third party agencies like Red Book, Auto Risk etc, which provide ‘IDV’ but the same is not authenticated or endorsed by Regulator or Industry Council B.
Some companies have a practice of referring to surveyors for arriving at ‘IDV’, which leads to additional cost borne by the Insured.
