IDV (Insured Declared Value) plays a crucial role in helping a person to claim the basic amount of money for which the car had been insured in cases of stealing or damage. IDVs are a must in car insurance plans when you’re trying to renew car insurance.
Importance of a car insurance – While investing in a new car, individuals need to get a car insurance plan for preventing two kinds of risks:
- Own Damage (OD) – All damages that can happen to a car due to the owner’s carelessness, or times when the owner is caught off guard, in man-made obstacles, like when theft or accidents occur, or fires break out.
- Third Party liability – When your car gets involved in an accident, third-party liability allows the owner to take care of the risks involved and monetary expenses for damages caused to another party.
It is the OD risk that is covered by the IDV. Thus, when one renews his car insurance, he is advised to keep a track of the limit and fix it if he finds it unsatisfactory.
Although the IDV of a new car is calculated based on the selling price by the manufacturer (the previous showroom price to be precise), the IDV value of the 4 wheeler insurance does start to reduce by 5% per year. A car which is more than 4 years old will have 50% reduced IDV amount.
So, when it comes to the renewal of the car insurance, one must be careful that the auto insurance quotes given by the policymakers do not reduce the Insured Demand Value any more than it already is. The policymakers have the ability to increase the car insurance value when one will renew it by almost 15%.
One must also be careful about the premiums when it comes to the car insurance and its renewal. When car insurance policies are discussed, then the policymakers may suggest giving a low car insurance premium. Although that might sound lucrative at the first go, there are chances that the IDV might also get lower due to the low amount of premium. When one renews a policy or gets a four-wheeler for the very first time, then, while quoting premiums, the brokers might present the buyer with multiple policies, and even compare the premiums of all. However, the insurance assured and declared is what matters the most, and one must not compare with it. Also, it is advised that every individual who buys a car must abstain from opting for cheap car insurance, as the reasons have been discussed earlier.
When it comes to the renewal of car insurance plan, then it is also advised to every individual that he must get the auto insurance quotes while settling the matters. This shall help in claiming the insured sum later. When paying high amounts of premiums, it’s expected that an insurer will demand a high amount of IDV. This must not be a problem if the insurer agrees with the policyholder on the amount of IDV. In that case, there must be a written document which shall preserve the claims made, the amount of premium given and the claim later.
Read Also: Covered Under Basic Car Insurance Policy
Thus, when one is planning to renew his IDV, then he must never settle for cheap car insurance or lower premiums. One can browse through Bajaj Finserv’s policies as they might help gain a better insight.
Find out how the Insured Declared Value plays an important part while you renew car insurance and how the amount paid as premium can affect the IDV when an individual will renew his car insurance. It shall also discuss how one can fix the IDV amount.