Everyone today knows that having car insurance is of utmost importance. The Indian roads are not always in the best conditions, which can sometimes make driving highly dangerous. We also have an unprecedented number of motor accidents daily, enhancing the need for a good car insurance policy. However, one must know that just having insurance for a four-wheeler is not enough. A person even needs to be mindful about their car insurance renewal. If you forget to renew your car insurance policy in time, you make yourself vulnerable to liability and place yourself on the wrong side of the law. But there are some things you need to look into when you opt for a car policy renewal. You could face trouble if you do not stay mindful of these aspects. One of these aspects which changes during a 4-wheeler vehicle insurance renewal is the Insured Declared Value of your car.
Let us first look at the Insured Declared Value of a car, and then we will look into how it changes during a car policy renewal.
What is Insured Declared Value or IDV?
The Insured Declared Value (IDV) is the highest Sum Assured determined by the insurer and offered if theft or total loss of the car occurs. IDV is essentially the car’s present market worth. The IDV in four-wheeler insurance refers to the sum of money the insurer will give the policyholder if the car is declared a total loss.
When calculating IDV for auto insurance, depreciation is subtracted from the manufacturer’s advertised selling price. Therefore, IDV excludes the price of insurance and registration. The Insured Declared Value of non-factory supplied accessories is computed independently at an extra cost if insurance is necessary.
Before you renew your car insurance policy, there are some things that you need to remember.
What to Keep in mind When Setting the IDV During an Insurance for Four-Wheeler Renewal
IDV estimates must be reviewed each time a customer renews their car insurance because a particular car model’s depreciation expenses must be considered. These policies include comprehensive insurance, damage coverage, and third-party liability insurance. Policyholders can maximise the benefits of their auto insurance coverage at a low cost due to inexpensive rates and agreements with network facilities that provide a cashless claim resolution service. The main website of the insurance provider features a 100% digital interface where customers can purchase these plans. Here, you may learn more, compare our partners’ features, advantages, and premiums, and select the policy that best meets your needs.
Reasons to Set the IDV Accurately During Car Policy Renewal
Now that we have understood the function of IDV and its importance in general let us look into why it is important to set the right IDV during insurance for four-wheeler renewal.
- You could end up paying lesser than what you were paying before if the valuation of the IDV is correct at the time of renewal.
- Do your homework or verify with the car manufacturer before accepting the IDV determined by your auto insurance company, as your IDV plays a big role in determining your premium. Ensure your IDV is set correctly to avoid paying a large premium or getting a minimal payout when making a claim.
- The value of your car is obtained by subtracting the depreciation amount from the current market value. If your vehicle is totalled or robbed, you will only be eligible for this amount as compensation.
- Lower your car’s IDV to reduce your insurance rate because doing so would lead to fewer disputed claims.
- After depreciation assessments have been taken into account, policyholders frequently purposefully lower the IDV of their vehicles to lower premiums because the rates for car insurance plans rely on the IDV estimations for the car. When they submit settlement claims, though, this may work against them. Therefore, it is advisable to set the IDV to be frozen at the present value of your car to receive enough damage settlement when the need arises.
IDV is an important component when it comes to car insurance. Today, people can buy a car insurance policy online, which allows them to make the necessary calculations before settling on an IDV. If you are going to renew your car insurance policy, use a car insurance premium calculator to calculate car insurance and make a proper decision about what IDV you must select for your car.