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Why to consider IDV at the time of renewing Bike Insurance

Bike Insurance Renewal

You might have come across the term IDV frequently while getting your bike insured or renewed. IDV is one of the most popular jargons used in the auto insurance industry. IDV stands for Insured Declared Value. Setting this value correctly while renewing bike insurance online is very important. In this article, we will elaborate on the importance of considering IDV at the time of bike insurance online renewal. But before that, let shed some light on what is IDV.

What is IDV?

IDV as mentioned earlier is the Insured Declared Value of your bike. It is very simple to determine the IDV of your bike for the purpose of bike insurance online renewal. Simply take a look at the current market price of your bike and select a figure approximately equal to this value. In terms of bike insurance, IDV forms the base price of your bike insurance policy. This takes us to why you should consider IDV at the time of bike insurance renewal. Let’s take a Look:

Importance of IDV

IDV is the maximum sum assured of your bike insurance policy. It is the maximum amount you will receive in case of a claim for total loss. Total loss is a situation of either total damage, where the bike is damaged beyond repair, or when the bike is stolen and cannot be traced by the police. Since this is the value your insurance company is liable to pay in case of a major claim, setting the correct amount is of utmost importance.

Some policyholders set a lower IDV in order to reduce the cost of their bike insurance policy. Yes, setting a lower IDV will reduce the cost of your policy, but this can cause a huge loss in case of a total loss claim. On the other hand, setting a higher IDV will unnecessarily increase the cost of your bike insurance policy. If you are a safe driver, major damage to your bike may not occur. Thus, you would be unnecessarily paying more premium for bike insurance online.

Depreciations and its Role in IDV

Every vehicle undergoes depreciation in its lifespan. Depreciation is nothing but the reduction in the monetary value of your bike with usage, wear & tear, and time. Depreciation plays a vital role in calculating the IDV of your bike.

Since your bike will be subjected to depreciation each year, its market value will reduce. This causes a reduction in the IDV as well. Thus, depreciation reduces the IDV of a bike. Each year you will be setting a lower IDV at the time of bike insurance renewal.

Depreciation is not calculated randomly at the time of bike insurance online renewal. IRDAI, that is the regulatory body that is responsible for the smooth functioning of insurance companies, sets the value of depreciation to be taken into consideration.

Two-Wheeler’s Age

IDV Percentage

Between 0 – 6 months

95% of Ex-showroom

Between 6 months – 1 year


Between 1 year – 2 years


Between 2 years – 3 years


Between 3 years – 4 years


Between 4 years – 5 years


Beyond the age of 5 years, the depreciation of your bike can be mutually decided between you and your bike insurance company.

Jargons related to Bike Insurance

  • NCB: NCB is a discount offered at the time of bike insurance renewal to those who did not raise a claim in the previous policy year. This discount can be as high as 50% if no claims are raised for 5 consecutive years.
  • Compulsory Deductible: This is the part of the claim amount that the policyholder needs to bear at the time of claim. Insurance companies ask you to pay the deductibles in spite of insurance to discourage frequent claims and encourage safe driving.
  • Own Damage: Damage caused to the insured bike is called own damage.
  • Third-party Liability: Any liability arising due to an accident involving a third party is known as a third-party liability.

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