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Key Features of Car Insurance Policy
|Own Damage Cover||Available with standalone and comprehensive plan|
|Third Party Damages||Covers injuries and property damages|
|Personal Accident Cover (PA)||Up to 15 Lakh|
|Add Ons||More than 12 add ons depending on plan and insurer|
|Cashless Repairs||Available through cashless garage facility by almost all the insurers|
|Buying/Renewal Process||Online and offline|
|Claim Process||Easy Claims through videos|
|Paperwork||Required only during offline process|
What should you consider while buying a car insurance policy?
Following factors should be considered while buying an insurance policy.
What is covered?
Before taking a policy you should be very careful in reading the offer document and see what is covered and what is not covered. Third party insurance policy would mean that you would need to take care of your own damage in case of any untoward happening.
High Claim Ratio indicates satisfied customer set. And it would also mean that you would have a higher chance of your claim getting settled.
In case you are going for a comprehensive car insurance package, you should also check the various add-ons being offered by your insurance company. Some of the add-on are very useful depending on your usage and profile. You should also check some new non-traditional add-ons like pay as you go insurance being offered by your insurance company.
What is Insured Declared Value (IDV)
Insured Declared Value is the maximum Sum Assured fixed by the insurer which is provided on theft or total loss of the vehicle. Basically, IDV is the current market value of the vehicle. If the vehicle suffers total loss, the Insured Declared Value is the compensation that the insurer will provide to the policyholder.
Insured Declared Value = (Company’s listed price – the depreciation value) + (Cost of vehicle accessories – the depreciation value of these parts)
|Age of Vehicle||% Depreciation for adjusting 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%|
The IDV of vehicles aged over 5 years is calculated by mutual agreement between insurer and the insured. Instead of depreciation, IDV of old cars is arrived at by assessment of vehicle’s condition done by surveyors, car dealers etc.
The calculation of the IDV depends on the following aspects:
- Manufacturer, make, and model of the car.
- Details of car registration, including the city of registration.
- Date of registration of your car.
- Whether it is a private car or one owned by a company.
- Cubic capacity and ex-showroom price of the vehicle.
Factors that Help to Determine the Insured Declared Value of a Car
The following factors help an IDV calculator to estimate the Insured Declared Value of your car. Take a look:
- Age of the Car – The age of your car is one of the biggest factors that help determine the IDV of your car. The higher the age of your car would be, the lower will be its IDV. The car starts to depreciate from the minute it comes out of the showroom. The rate of depreciation depends on the brand, model and popularity of the car.
- Make and Model of the Car – The make & model of the car helps to determine how high-end is the car and how high would be its repair cost. For example, the IDV of an Audi would be higher than the IDV of a Hyundai due to its higher cost and maintenance. Also the initial depreciation of a luxury car or an unpopular car is way higher than a low cost popular car brand model.
- Standard Depreciation – The depreciation schedule shown in the table earlier impacts the Insured Declared Value of your car. The depreciation to the market value of your car is charged based on the percentage mentioned in the depreciation schedule.
- City of Car Registration – The city where your car has been registered also influence the IDV. The Insured Declared Value of a car registered and running in a metropolitan city like New Delhi will be open to more risks than the IDV of a car running in a small town in UP. Their is a supply demand imbalance in both th emetro cities and small town. We have a higher supply ratio in metro cities and higher demand ratio in smaller town which affect IDV Value of the car
- Condition of the vehicle – This is obviously the most important factor that determines the IDV value of your car. The better the condition of your car, the higher IDV you will get and vice versa.
Advantages and Disadvantages of Higher IDV
|Nature of IDV||Advantages||Disadvantages|
|High IDV||Higher compensation will be paid during theft or total loss claims||Higher premium amount to be paid|
|Low IDV||Lower premium amount to be paid||Lower compensation will be paid during theft or total loss claim settlement leading to losses|
Should you care about the IDV Value of your car?
The Insured Declared Value of a car is an extremely crucial aspect of buying a car insurance policy. Besides determining the maximum compensation amount for your car, it also plays a vital when it comes to the premium of your car insurance policy.
The IDV is the key to the amount of premium that you will pay for your car insurance. This is because IDV reflects the current market value of your car and mirrors the liability of your motor insurance company at the time of claim settlement. A lower IDV would mean lower liability for the insurance provider and thus, a lower premium is charged and vice versa. At the time of policy issuance, one can vary the IDV value by around 10~15% depending on the IDV thus increasing or decreasing the premium value.
Also when you sell the car to another buyer, IDV plays a major role as it decides the resale value of your car because majority of buyers take the IDV value of your car as a base.
During refinance on your car, the IDV value plays again a major role because the IDV value decides the real value of your car.
What will be the Insured Declared Value for a new car?
Ideally, the insured declared value or IDV of a new car should be equivalent to the invoice value of the car. However, depreciation is deducted even from the value of a new car because it has been sold for usage. Generally, the depreciation charged on a new car is about 5% and thus, the default maximum IDV of a new car stands at 95% of the invoice value of the car.
Why should you buy your car insurance policy online from Motor Haat?
Following are the advantages of buying car insurance from Motor Haat
- You can purchase the policy with few clicks.
- Even if your insurance has expired, our executive will come to your home and help you in evaluating your car
- Best premium offered
- Easy and paperless process
- Hastle free process
Check Your Current Market Value of Your Car
Check the current market value of your car. Our used car market value tool gives you an approximate value so that you can get a rough range of the the IDV of your car.