Understanding IDV for Two-Wheelers: Value, Premium & Claim

We’ve talked about bike and scooter insurance in detail here many times, but now the time has come to delve into some specific insurance-based terminology that is not only important to know for the customer, but also affects his/her vehicle ownership in a tangible way.

Which brings us to the topic of this blog: IDV

So, what is IDV? To describe it simply, it’s the value that your insurance company thinks your bike is worth today.

Which means one thing: IDV (Insured Declared Value) is the maximum amount your insured will pay if your two-wheeler is stolen or damaged beyond repair.

Why is understanding this important? Because of rider psychology.

Many riders focus only on the premium amount, thinking that cheaper is better. What truly matters is how much money you actually get back when something goes wrong. After all, when you buy your bike with hard-earned savings, shouldn’t your insurance also protect most of that value?

To illustrate this better, let’s consider an example:

You purchase a scooter for₹1,00,000. After a couple of years, it’s worth around ₹70,000 in the market. But you chose a lower IDV of ₹45,000 just to reduce the premium. If theft happens, the insurer will only pay you ₹45,000, and the remaining ₹25,000 is your personal loss. 

The loss we just described? That’s the hidden risk behind choosing the wrong IDV. Often, one decision can either save or cost you thousands of rupees. 

At Ecozaar, we believe every rider deserves fair protection and complete clarity. Understanding IDV isn’t complicated. But ignoring it can be very expensive.

This guide breaks down IDV in the simplest way: how it’s calculated, how it affects your premium and claim payout, and how to pick the right IDV for your bike or scooter. 

Let’s make sure your insurance actually protects you when you need it the most.

How it works is: bike insurance companies follow a standard depreciation schedule based on age. Hence, IDV is calculated using:

Formula:
IDV = Ex-showroom price – Depreciation
(+ value of extra accessories, if covered)

Below is the typical depreciation chart used for two-wheelers:

Bike Age	Standard Depreciation %	Example IDV (if bike price was ₹1,00,000)
0 – 6 months	5%	₹95,000
6 months – 1 year	15%	₹85,000
1 – 2 years	20%	₹80,000
2 – 3 years	30%	₹70,000
3 – 4 years	40%	₹60,000
4 – 5 years	50%	₹50,000
5+ years	Mutual decision after inspection	Depends

Accessories like fancy handlebars, crash guards, mobile mounts, or custom seats can be included, but at a depreciated value.

Want a better, simplified example?

If your bike costs ₹1,20,000 (ex-showroom) and is 3 years old:
Depreciation = 30% → ₹36,000
IDV = ₹1,20,000 – ₹36,000 = ₹84,000

Many insurers allow ±10–15% adjustment depending on bike condition and market value. So you can negotiate IDV if required.

Quick rule:
Lower depreciation → higher IDV → better coverage.

This is where most owners go wrong and are often confused. IDV directly impacts three major financial factors:

1. How does claim payout work?

If your bike is stolen or badly damaged, you will only receive the amount up to your IDV.
Nothing more. Nothing less.

Here’s an example:
Your bike’s real value: ₹60,000
You picked IDV: ₹40,000
In case a theft happens? You lose ₹20,000 from your own pocket.

2. How do premiums work for IDVs?

When you ask for a higher IDV, you have to pay a  higher premium
When you choose a lower IDV? You have to pay a lower premium.

But if you reduce IDV too much,  you save a little premium but lose BIG money during a claim. So the goal is to be fairly informed and savvy regarding this.

3. Can there be instances of disputes between insurer and customer?

If the IDV is unrealistically high (over-declared):

• The insurer may reduce the payout during the claim
  
• More questioning and delays
  
• Potential complaints
  Bottom line:

Choosing the “lowest IDV to save money” is a trap.

IDV can change across bikes because of:

• Age: The biggest factor is age. The older the bike, the lower the IDV.
  
• Make & Variant: Premium models have better retained value
  
• Market Demand: City-wise resale conditions differ
  
• Selling Price Changes: Brand revises price → IDV varies too
  
• Accessories: Covered only if declared during insurance
  
• Vehicle Condition: For older bikes, the insurer may inspect them before making further decisions
  

Follow this decision strategy during insurance renewal:

Step-by-Step Guide

1. Check online resale prices of similar bikes in your city
   (OLX, Quikr, BikeDekho, ZigWheels)
2. Compare with the insurer’s proposed IDV
   Is it too low or close enough?
3. Add accessories value if required
   Better coverage for high-value modifications
4. Use the ±10–15% adjustment window
   Ask your insurer to match market value
5. Consider real-world risk

• High-theft area? → Go for realistic higher IDV
  
• Old and rarely used? → Balanced IDV is OK
  

Here’s a quick decision tree that can help you

Scenario	What You Should Do
Insurer IDV ≈ resale value	Accept
Insurer IDV < resale value	Request increase
Insurer IDV > resale value	Lower it → avoid overpayment
Many accessories installed	Include them
Riding daily in a metro/city risk zone	Prefer higher IDV

Pro tip: We’ve said it before. Don’t choose IDV just to save premiums. Choose one that protects you financially.

Here’s what happens: After 5 years, insurers stop using standard depreciation tables because every old bike ages differently.

What happens then?

• Insurer evaluates bike condition
  
• A surveyor may check the bike
  
• IDV is mutually decided between the insurer and the insured
  
• Rare or vintage bikes may have a higher market value
  

So if your bike is above 5–7 years old,  documentation and transparency help secure a fair IDV. It’s important to be mindful of that if you’re a two-wheeler owner.

Want to make things a bit easier for yourself? Make sure to browse some claim outcomes from real-world scenarios.

Case	Bike Age	Real Market Value	Selected IDV	Claim Result
Good Choice	6-month-old	₹1,10,000	₹1,05,000	Theft → full ₹1,05,000 payout
Bad Choice	4-year-old	₹65,000	₹40,000	Theft → ₹25,000 loss to owner
Balanced	3-year-old	₹85,000	₹82,000	Fair payout

Before renewing insurance, always:

• Check resale value online
  
• Compare insurer’s IDV with depreciation table
  
• Adjust within allowed range
  
• Recheck accessories coverage
  

Most insurers also provide online IDV calculators during policy purchase/renewal. You can use them as a starting reference, then fine-tune with the available real-world data. Make sure you make the best choice.

1. Can I change IDV?
   A. Yes. You can increase or decrease it within the insurer’s permitted range.
2. Can the claim payout exceed IDV?
   A. No. IDV is the final payout limit for total loss/theft.
3. Does IDV affect third-party insurance premiums?
   A. No. It only impacts the “own-damage” portion of comprehensive insurance.
4. Why does IDV reduce every year?
   A. Because bikes lose value over time due to depreciation.
5. Is a higher IDV always better?
   A. Only if it matches the realistic market value. Over-declaring wastes the premium.
6. Does zero-dep insurance change IDV?
   A. No. Zero-dep only removes depreciation during repair claims.

Here are some key takeaways for bike owners that we hope you’ve derived from the blog. Let’s put them concisely:

• IDV = Bike’s current market value
  
• It reduces every year due to depreciation
  
• IDV impacts your premium and claim payout
  
• Wrong IDV = money loss during claims
  
• Always compare IDV with the actual resale value
  
• Reassess IDV at every renewal
  

As we mentioned before, at Ecozaar, we believe every rider deserves fair protection and complete clarity. Understanding IDV isn’t complicated. But ignoring it can be very expensive. Make sure you always stay on top of it.

For more on two-wheeler safety, keep on following Ecozaar.