IDV in Car Insurance: The Number That Decides Your Claim Payout

IDV (Insured's Declared Value) is the sum insured on your car policy. It is fixed when the policy starts or renews, and in a total loss or theft your insurer's liability is capped at the IDV, less the value of the wreck. A car is treated as a constructive total loss when repair and retrieval costs exceed 75% of IDV.

How IDV is fixed

The rule comes from the India Motor Tariff 2002 (General Regulation 8), which the General Insurance Council reproduces on its IDV calculator page and insurers carry into their IRDAI-filed policy wordings. It says IDV is fixed at the start of each policy period on the basis of the manufacturer's listed selling price of the brand and model, adjusted for depreciation as per an age schedule. Accessories not included in the listed price are valued the same way.

Formula: IDV = listed price × (100 − depreciation) ÷ 100. For a car aged 3 to 4 years at renewal: 12,00,000 × 60 ÷ 100 = ₹7,20,000. The same wording adds that, for claim settlement, the IDV does not change during the policy period, so a claim in month 11 uses the same IDV as one in month 1.

Total loss and constructive total loss

Insurers' policy wordings (for example Go Digit's multi-year private car wording, UIN IRDAN158RPMT0035V01202425) define a total loss or constructive total loss (CTL) as a case where the aggregate cost of retrieval and/or repair, subject to the policy terms, exceeds 75% of the IDV. For total loss or CTL, the insurer's liability does not exceed the IDV less the value of the wreck. The same wording treats IDV as the market value throughout the policy period without further depreciation for these claims.

Worked example, using the 3-to-4-year row above (IDV ₹7,20,000, so the CTL line is ₹5,40,000):

• Surveyor's repair estimate ₹5,40,000: not more than 75%, so it is treated as a repair claim, not a CTL.
• Repair estimate ₹5,60,000: above ₹5,40,000, so the car is a CTL.
• On a CTL, if the wreck is valued at ₹60,000 (illustrative), the ceiling is 7,20,000 − 60,000 = ₹6,60,000. Deductibles and other policy terms can reduce this.

Partial losses are settled differently: actual and reasonable repair or replacement costs, after a separate depreciation on replaced parts. In the Go Digit wording that is 50% on rubber, nylon, plastic parts, tyres, tubes, batteries and airbags, 30% on fibre glass parts, nil on glass, plus an age-based scale on other parts. Do not mix this up with the IDV schedule. Optional covers can change it, so check your wording.

How IDV affects premium and claim

Own-damage premium is generally calculated on IDV, so a lower IDV gives a lower quote. The rate is the insurer's own, so check your quote. As an illustration only, at an assumed 2% rate, cutting IDV from ₹7,20,000 to ₹6,00,000 saves ₹2,400 a year, while a total loss in that year would pay ₹1,20,000 less. The wording is plain: in a total loss the insurer pays up to the IDV in your policy schedule, not the price the car would fetch.

Checking your IDV at renewal

1. Find the manufacturer's listed price for your exact model and variant, and your car's age at the policy start.
2. Apply the schedule above. The General Insurance Council's IDV calculator (idv.gicouncil.in) gives an indicative IDV by state, make, model, variant and registration month.
3. Compare with the IDV in the quote. A small gap can reflect the insurer's own price data; a large one is worth querying.
4. For cars over five years, get two or three quotes and compare the IDV agreed, with the car's condition and service record as supporting evidence.
5. Ask whether a return-to-invoice cover is available. In the Go Digit wording it pays up to the invoice price in a total loss or total theft, at the insurer's discretion, which can cover the gap between IDV and what you paid.

For the renewal workflow itself, including no-claim bonus and add-ons, see our car insurance renewal guide.