Insured Declared Value (IDV) in car insurance equals the car’s ex-showroom price minus depreciation, excluding registration fees, road tax, and initial insurance charges. Accessories and CNG kits that come with the car are part of that price, while those fitted later must be declared separately to be included in your IDV in car insurance.
What Is IDV in Car Insurance?
IDV is your car’s current market value after depreciation. It is the most your insurer will pay if your car is stolen or declared a total loss. In a total loss claim, repair costs aren’t considered, so IDV in car insurance becomes the basis of your payout.
Disclaimer: IDV is fixed at the start of each policy period, as set out in the India Motor Tariff, and may vary slightly between insurers for the same car.
What’s In and What’s Out of Your IDV?
Here’s a quick view of what counts towards IDV in car insurance and what doesn’t.
| Item | Included in IDV? | How It’s Treated |
| Ex-showroom Price | Yes | Forms the base of the calculation |
| Factory-fitted Accessories | Yes | Already part of the ex-showroom price |
| CNG or LPG Kit Included in the Listed Price | Yes | Already part of the ex-showroom price |
| Accessories Fitted Later | Only if declared | Valued separately, minus depreciation |
| CNG or LPG Kit Not in the Listed Price | Only if declared | Insured separately on its declared value |
| Registration Charges | No | Excluded |
| Road Tax | No | Excluded |
| Insurance Cost | No | Excluded |
Disclaimer: Treatment of accessories and fuel kits may vary by insurer. Please confirm with your insurer before buying or renewing.
Does IDV Include Road Tax and Registration?
No. IDV in car insurance is calculated from the manufacturer’s listed selling price, which is the ex-showroom price. The ex-showroom price is your car’s cost before insurance, road tax, and Regional Transport Office (RTO) registration are added. So even if your on-road price was much higher, your IDV starts from the lower ex-showroom figure.
| Cost Component | Amount |
| Ex-showroom Price | ₹8,00,000 |
| Road Tax and Registration | ₹80,000 |
| First-year Insurance | ₹35,000 |
| On-road Price | ₹9,15,000 |
| Base for IDV (New Car, 5% Depreciation) | ₹7,60,000 |
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In this illustration, ₹1,15,000 of your on-road spend never enters your IDV.
Disclaimer: Figures are illustrative only. Actual costs and IDV depend on your car, city, and insurer.
Are Accessories Included in IDV?
It depends on who fitted them:
- Factory-fitted accessories, such as an infotainment system that comes with your variant, are already in the ex-showroom price.
- Accessories added later, such as alloy wheels, a music system, or seat covers, aren’t covered automatically. You need to declare them so their value is added to your IDV.
Under the India Motor Tariff, accessories fitted to the car but not included in the manufacturer’s listed price are valued in the same way as the car itself, after depreciation. Electrical and electronic fittings must be specifically declared to be insured.
Disclaimer: Coverage for accessories depends on accurate declaration and the insurer’s terms.
Does a CNG Kit Change Your IDV?
Only if the kit isn’t already part of your car’s listed price. Here’s how it works:
| Type of CNG or LPG Kit | Effect on IDV |
| Included in the Manufacturer’s Listed Price | No change, as it’s part of the ex-showroom price |
| Not Included in the Listed Price | Insured separately on its declared value |
The India Motor Tariff mandates that a CNG or LPG kit on a bi-fuel car permitted by the Regional Transport Authority (RTA) is to be insured separately on its declared value.
Disclaimer: Rules for externally fitted fuel kits vary by insurer. Please check your policy wording.
How Does Depreciation Affect IDV Each Year?
IDV in car insurance drops every year as your car ages. Insurers follow the depreciation schedule set out in the India Motor Tariff:
| Age of Car | Depreciation |
| Up to 6 Months | 5% |
| 6 Months to 1 Year | 15% |
| 1 to 2 Years | 20% |
| 2 to 3 Years | 30% |
| 3 to 4 Years | 40% |
| 4 to 5 Years | 50% |
| Above 5 Years | Agreed between you and the insurer |
So the IDV of a car with an ex-showroom price of ₹8,00,000 would be about ₹6,40,000 in its second year, at 20% depreciation.
Disclaimer: Depreciation rates are as per the India Motor Tariff schedule for fixing IDV. IDV for cars over five years old, or obsolete models, is mutually agreed.
Should You Choose a Higher or Lower IDV?
IDV in car insurance affects both your premium and your payout, so it’s worth setting carefully at every renewal.
| IDV Choice | Premium | Claim Payout |
| Higher IDV | Higher | Higher in a total loss or theft |
| Lower IDV | Lower | Lower in a total loss or theft |
The ideal IDV in car insurance is close to your car’s current market value. Avoid setting it very low just to cut your premium, or excessively high, as neither works in your favour at claim time.
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Disclaimer: IDV choices are subject to insurer approval and policy terms.
Standard IDV calculations leave out on-road expenses like road tax and registration. Adding your retrofitted CNG kits and extra accessories, whether directly or via online insurance brokers like Jio Insurance Broking Ltd., ensures your IDV in car insurance covers every upgrade accurately.