How is IDV calculated in car insurance?
Insured Declared Value is the manufacturer's listed selling price for your car's make, model and variant, less a depreciation percentage set by the age of the vehicle. It is the ceiling on what the insurer pays if the car is stolen or written off — not what you paid for it, and not what a dealer would offer you today.
Key takeaways
- IDV caps your total-loss payout; it is not a valuation of your purchase price.
- Own-damage premium is a percentage of IDV, so cutting IDV makes a quote look cheaper and leaves you underinsured.
- Past five years, IDV is negotiated with the insurer rather than set by a fixed table — argue for a fair figure.
- Accessories and a CNG kit sit outside IDV unless they are declared and separately valued.
What IDV actually is
Insured Declared Value is the ceiling on what your insurer will pay if your car is stolen or written off. It is not what you paid for the car, and it is not what a dealer would offer you. It is the manufacturer's listed selling price for that make, model and variant, less a depreciation percentage set by the age of the vehicle.
Why a low IDV makes a quote look cheaper
Because the premium for own-damage cover is calculated as a percentage of IDV, a lower IDV produces a lower premium. That is exactly why it is so often quietly reduced to make a quote look competitive. The saving is real but small. The shortfall on a total-loss claim is real and large.
The one test that tells you if your IDV is right
The practical test is simple: if this car were stolen tomorrow, would the IDV on this policy let you replace it with an equivalent vehicle? If the answer is no, you are underinsured, and the premium you saved will not close the gap.
How the age of the vehicle changes the number
Age bands drive most of the depreciation. A vehicle under six months old typically carries the smallest reduction, and the deduction steps up each year. Beyond five years, IDV is negotiated between you and the insurer rather than set by a fixed table — which means it is worth actively arguing for a fair figure rather than accepting the first one offered.
What sits outside the IDV
One more thing owners miss: if you have added accessories or a CNG kit, they are not automatically inside the IDV. They need to be declared and separately valued, or they are simply not covered.
This guide is general information, not advice on your particular circumstances. Cover, exclusions and waiting periods are governed solely by the policy document issued by the insurer. Please read the policy wording before you buy.